Professional Documents
Culture Documents
ON INDIAN ECONOMY
I
Definitions Of The Term “Privatization”
1. Financial Resources
The main advantage of privatization is to generate
financial resources for the government in order to
generate resources disinvestment of public sector
enterprises.
2. Optimum Utilisation of Resources
It has been observed that the public sector has
failed in the optimal use of national resources.
The private sector may success in the optimum
use of resources by maintaining efficiency.
3. Fostering Competition
Most of the public Enterprises enjoy the status of
monopoly. Privatization creates a situation of
competition for public Enterprises and they are
forced to improve their efficiency.
4. Better Industrial relation
Privatization may increase the number of workers
and the common man who are shareholders. This
could make the Enterprises subject to more public
vigilance.
5. Reduction in Political Interferences
The process of privatization reduces political
interferences in the public sector enterprises by
giving more representation to the private sector in
the management of Public Enterprises.
6. More Productivity
The private sector can improve
productivity by maintaining efficiency in
its operations.
Disadvantages of Privatisation
Impact Of Privatization On Indian Economy