PRIVATIZATION

Introduction to privatization

Started in 17th century. Gained worldwide momentum in 1980s. Introduced in India soon after the economic reforms in early 1990s

Privatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service from the public sector (the state or government) to the private sector (businesses that operate for a private profit). In a broader sense, privatization refers to transfer of any government function to the private sector - including governmental functions like revenue collection and law enforcement

Significance of privatization

Economic growth: Allows foreign direct investments[FDI]. Shifts labour and capital to more efficient hands. Improves the gross domestic product of the country. Job gains and less requirement of subsidies.

Significance of privatization

Industrial growth: Throwing Open Industries Reserved For The Public Sector to Private Participation. Higher the competition, higher the efficiency. Fosters the expansion of most essential areas of the society[like water, electricity ,infrastructure etc.] Revival of sick public sector undertakings.

Affects of privatization

Downsizing of public sector undertakings, resulting in less government control and tapping government revenue generation. Bureaucracy free control
Heterogeneous policies and regulations by diverse firms.

Eliminates monopoly.

List of privatized public sector units

Lagan jute machinery company limited[LJMC] Modern food industries limited[MFIL] Bharat aluminium company limited[BALCO] CMC limited HTL limited IBP co limited Videsh sanchar nigam limited[vsnl] Indian tourism development corporation [ITDC] Hotel corporation of india limited [HCI] Paradip phosphates limited [PPL] Jessop and company limited Hindustan zinc limited Maruti udyog limited Indian petrochemicals corporation limited

Privatized Indian airports

Delhi airport Mumbai airport Hyderabad international airport Bangalore international airport Cochin international airport

Conclusion

Fueled by economic reforms in the nation. Perceived government failure is one of the powerful reasons for adopting privatization programmes. Private firms adopt mostly capital intensive technology which decreases employment A privately owned firm is expected to maximize profits whereas a state owned firm is expected to maximize social welfare. Depending on business cycles and foreign ownership the efficiency have been varied globally.

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