Privatization :
Privatization of Government’s own organisation is the transfer
of publicly owned or Governmental operated organisation to private ownership or
operation. It is told that the basic
objectives of privatization are: (1) to increase efficiency in the operation
(2) to reduce public debt/deficit (3) to obtain funds/ revenue in abundant (4) to
strengthen the stock markets. If you
analyse (1) point of increasing efficiency, it is due to Service policy of
Administration, ministerial or political interference, operation policy in favour of private
operators etc., If you think of reducing
public debt/deficit, then the answer is Working policy and strategy to bring
about profits or losses and moreover corruption etc., If there is Statutory Audit, Internal Audit, Tax Audit, Company Audit, CAG Audit etc., are compulsory for all Public Sector Undertaking or public enterprises, carried out every year, then the report of all such Audits must have indicated for company's business is going into losses or it is incurring losses in near future and observations on Working policies etc.,
Public sector companies and assets are being sold to bridge the fiscal deficit. Selling out such companies are not only solution to bring about into profit for the Government, but analysis should be carried out the factors responsible for the companies incurring into losses, even though there are several nominations from the Government in the directorial posts or boards of Director, responsible for running the business of the company.
All these factors are to be analyze along with a multitude of social and economic problems accentuated by abysmal poverty and a sick capital base. Privatization of public sector should be addressed along with other associated economic issues such as Unemployment, reducing per capita and national income, Standard of living, Poverty, education standard etc.,
It is not just the change of ownership of private replacing public or the commanding heights of the economy shifting from the public to the private sector will solve economic issues attributable to the problem.
with the sale of the entire commercial airlines or civil aviation sector would move over entirely to the monarchy of the private. It will be the economy of few Capitalists. When private operators enter into Airliner field, after amendment of the Air Corporation Act, it was expected to have a competitive environment in the field and public will rip the benefit out of it, but Deccan Air and ModiLuft collapsed overnight. Following which, two airlines, Jet and Kingfisher have also shutdown. Many of the concerns expressed in 1950 by the Air Transport Inquiry Committee (headed by Justice Rajyadhaksha) are still valid and the roots of the collapse can be traced to some of those concerns.
In a public sector company, there is a lot of political interference and pressure is mounted to decide the business policy as is directed by the political leaders. Consequently, public company incurs losses and the same political leaders demands its privatization. This may dissuade the company from taking economically beneficial decisions.
We have noticed how Electricity bill, water bills, energy bills, train and bus fares keep on rising in real sense. And did you know that the US privatised health system costs double what we pay for ours?
In a privatised service, profits must be paid to shareholders, not reinvested in better services. Interest rates are higher for private companies than they are for government. Plus, there are the extra costs of creating and regulating an artificial market.
why privatisation is bad for Indian economy ?
There are multiple reasons for privatisation is bad for Indian economy
1. You can't hold private companies accountable:
If a private company is running the service, then there is very poor scope of having any accountability or answerable for the omission or commission of any mistake. In private sector, better services or attendance of complains are not taken care, while
public services are agreed between private companies and government behind closed doors. There is very little transparency, public accountability or scrutiny. The companies are not subject to Freedom of Information requests because of ‘commercial confidentiality’.
2. Privatisation costs more:
Primarily making profits are main air of Private services. So, public has to pay more, both as a taxpayer and directly when they privatising public services. There are so many examples in Indian economy that water bills, energy bills, train and bus fares keep on rising in real terms? And did you know that the US privatised health system costs double what we pay for ours?
