Should Indian economy be privatized?
Should India Economy be privatized. It has a mixed economy should go for privatization or continue with the current system, is a burning discussion topic in view of the various steps taken in different sectors by the Govt of India. Whether the move will benefit the country in terms of growth or will not.
Key facts about Privatization of Economy
Generally privatization is a way of changing the relationship between the state and the private sector to enhance the role of the private sector in the country in the functioning of the national economy as a whole. Accordingly, privatization broadly means any process that reduces the state’s dominant role in directly owning and running the economic activities of a country.
Many countries like China with state controlled economies have gone far enough to open the doors of economies to invite private players to achieve faster growth rate. The craze for privatization has risen manifold after the ideological defeat and disintegration of the state controlled economy of the socialist bloc.
In a country like India, Privatization in today’s concept is seen as a means of increasing output, improving quality, reducing unit costs, curbing public spending and raising cash to reduce public debt.
Privatization is the need of the Hour
Not everything is good with privatization
The concept of welfare state may get defeated with the Privatization of economy. Private sector would not care about the society as its main objective is to earn profits.
Government or Public sector companies also keep doing social work simultaneously. In case privatization happens, it will result in fewer funds for society because private companies have no obligation to do social work.
Privatization will also result in retrenchment of employees. In private sector enterprises there is emphasis on performance which indirectly results in work pressure and meeting deadlines or targets and individuals who have been doing work for years without much pressure find it difficult to adjust to new setting and many end up resigning from their service.
Risk of short term gains is prominent in private companies. There are decisions to start ventures which result in short term benefits but may not be good for long term.