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  • Category: Miscellaneous

    To what extent privatization should be done ?

    Privatization means the sale of entire or some equity of state-owned units to private shareholders, the transfer of ownership from state entities to whatever private-sector units of production, as well as the beginning of private management and private control.
    Through privatization, the functions of sick public sector units can be controlled by the discipline of market mechanisms instead of undisciplined mechanisms. Privatization is also a medium to attract foreign investors. Any country in which foreign equity is attracted, that country becomes more powerful.
    But, is it appropriate for the country to promote such a lot of privatization?
    If the private sector takes up the task of fulfilling the basic needs, then it will not have any responsibility to achieve the social goal, rather it wants to earn profits in all of these, what is your idea how and to what extent privatization should be done.
  • #708016
    Why public money should be wasted in sick industries? How a private company can get profits within the same setup but not a government undertaking? Let us think in those lines. A factory of a private organisation can produce an article at a lower cost, but the same costs higher if it is made in a government undertaking. The factory will have more staff than required. The inputs cost will be higher. Overheads also will be very high. Wastage will be high. Productivity will be less. All this put together, the sales of the products will suffer a lot and the unit will become bankrupt. In government organisations, the belonging will be less.
    To avoid these problems privatisation is the best solution. The management will be on job 24 X 7. They will monitor the working carefully and see that the unit will come into profits. The government will get money in the form of taxes paid by the management as well as the staff. So privatisation is a good solution from preventing draining of money into the individual accounts and see that the government will get some money without any investment.

    always confident

  • #708017
    To what extent the privatization has to be done is the million dollar question to which every government has their own answer. But it is the act that many of the public sector units are suffering loss and even in the brink of closure but the mounting cost of maintenance remains the same and the burden increase on the government which cannot always make provisions and thus it wants to get rid of ailing organizations which cannot be reverted back and the best way is to sell part of its holdings to private sector and see for some profits in future. Invariably the government organizations cannot compete with the expertise of private companies and thus they fail. Instead, those companies can be fully privatized and sold for the price. But strong employees union will be thwarting such moves and thus this problems persist.
    K Mohan @ Moga
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease

  • #708033
    When the profit is very less in a government organization, the employees receive their salary as usual because the government is bound to pay their employees. The government employees in most of the cases do not care much about the welfare of the organization and work casually because they will receive their salary on time. There seems to be less accountability in many government organizations and if something is not done the blame-game starts within the various departments. Ultimately, the government becomes a loser because the expenditure becomes more than the income. To prevent this from happening, the government in office plans to privatise the sick units. I would say rather than fully privatising various sectors, a formula can be arrived at where the government and the private sector both will work in partnership. While private organizations remain busy to make profits, the government in a poor country like India has a lot of responsibilities towards its citizens. If both the sectors can work together in any venture that would be a good idea. There is a lot of insecurity in the minds of people because no social security scheme exists for everyone. Security schemes are there for only a few. For this, the government has to apply its minds carefully while thinking of privatisation.

    "Life is easier when you enjoy what you do"

  • #708040
    In the developing phase Govt control and management is required everywhere. It happened in our country also that after the independence there was a need felt and the so many Public Sectors were created. Once some development is achieved, freedom to private companies has to be increased because they can work with more efficiency and devotion than that of their Govt counterpart. The reason is simple they have a bigger stake in their business and its failure is death bell for them. So, as on today we have to increase the private enterprises and reduce the Govt ones. What we have to increase and enhance is the governance to control these private players. Govt should not waste its time in creating industrial and business inside it and should only concentrate and keep defense, judiciary, and administration under it.
    Knowledge is power.

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