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Should Indian economy be privatized?

Should Indian economy be privatized?

Introduction

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.


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Privatization is the need of the Hour

  • As the world economy tend to become one village, privatization as an approach standard appears to override political compulsions as an instrument for achieving competitive efficiency and resource enhancement.
  • Privatization is beneficial for the growth and sustainability of the state-owned enterprises. Following the trend of privatization across the world, the Indian government in the 1990s also introduced privatization amid hue and cry from many of the political and social groups.
  • To accomplish an expansion in the yield of the nation there is a requirement for privatization at a fast scale which will help in enhancing nature of the items by lessening unit costs, checking open spending and raising money to diminish open obligation.
  • Privatization dependably helps in keeping the buyer needs highest, it enables the legislatures to pay their obligations, it helps in expanding long haul employments and advances focused proficiency and open market economy. In a quickly rising economy like India there is a requirement for the legislature to realign its needs in activating the aptitudes and assets of the private area in the bigger undertaking of the improvement.
  • Nowadays privatization is being viewed as an answer towards the issues of open ventures as these endeavors on being exchanged from the general population to the private hands will turn out to be less politicized which subsequently will help in stopping the regulatory debasement. It will likewise help n expanding the duty incomes from benefits and reinforcing general society treasury. The upsides of privatization can be seen from both micro economic and macroeconomic effects that privatization applies.
  • Indian economy has a tremendous potential for growth. The economy which used to rise at 3-4% of GDP had steadily registered rising growth to 9.7% after introduction of reforms.
  • Privatization will give ample space for creative and innovative thinking as well as systematic and strategic planning to realize the full potential of economy

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.

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