Is privatization good for India ? India and privatization.


It’s a very important topic in India because the government has decided to privatize many public sectors.

What is privatization?

It means the transfer of ownership, property, or business from the government to the private sector this is privatization, or we can simply say it’s a process in which a publicly-traded company is taken over by few people.

What is the advantages of privatization?

  1. Improved efficiency.
  2. Lack of political interference.
  3. Short-term view.
  4. Increased competition(Quality work)
  5. Government will raise revenue from the sale
  6. Shareholders

So, these are the major benefits of privatization, I can surely say it’s very difficult to develop without privatization, we can take the example of all developed countries, it definitely gives quality work, it can increase employment which is the major concern in India. It will generate revenue to the government etc.

Since every coin has two sides, it has negative sides also which are:

disadvantage of privatization
  1. It will lead to price hike
  2. problem from finance
  3. High-cost economy
  4. Bad industrial relations
  5. improper working
  6. opposition from employees.

These are the some of the disadvantages of privatization, it will create a huge negative impact on government employees, which will result in improper working and stress among people. People will feel insecure about their job.

But overall if we compare we will see problems can be sorted out and for development, privatization is very much required, but the main question arises.

Are we really ready for privatization at the time?

I think a big No since there are about 50 percent who are living below the poverty line, this is huge so if public sector like railways, petrol, Lpg and many such daily requirement companies will be privatized it will be very much unfair for these people, these are below the poverty line also there are huge in numbers who are the middle class who travel daily to work, so if these things will be privatized, prices will surely hike and these lower and middle-class people will suffer more and they will not able to save and hence poverty may increase for some years in India.

But since for every development hard steps are required, So It Is necessary but it should be done after some years so that everybody should be comfortable with it.

As someone said,

“Privatisation is more efficient and effective in some cases, but not in intelligence”.

So why not we should have patience and make it effective for everyone.

What is the alternatives of privatization

Across Europe, local authorities especially are reacting to private-sector failures or undue profit taking by thinking again. Public managers and politicians are starting to reconsider the notion that subcontracting is the answer to problems in public service management.


Instead of privatization, municipalization is very much effective, though in India cities are already under the municipality, but still, there are many small cities where the municipality is needed, in cities where it is established they also need to be function properly and be active, it’s very very effective instead of privatization because it’s of public interest not private. For example in Paris water distribution was privatized after which private companies started taking a lot of money from the public for their own profit, it was so horrible that led the government to again unprivate water and give it to the public.

So why we are in hurry to privatize instead we should focus on what we have and how to make it better?

We should not neglect the capacity of government workers.

Many people think that privatization is necessary to get quality work, but I want to stress at this point that government workers are also very much qualified and they have good knowledge of their work but what they lack is leadership, in the government sector, they are not fully motivated to do their work and they left their work for tomorrow, but by these things we cannot neglect their capacity though they give exams and compete with many to join the work, but still government sector is staggering to get best out of them, so it’s the total responsibility of government and also workers to get best and to give best, this should be improved.

An ecologist, Garret Hardin, coined the phrase “the tragedy of the commons” in a (shockingly eugenicist) essay in science in 1968. But the free-rider problem that afflicts public goods has been well-known to economics for a century. Consider a pasture on which every herdsman may graze his cattle. Each has an incentive to use it as intensively as possible:

 since it is open to all, restrain exercised by only herdsmen simply frees up grass to be chomped by another’s animals, leaving those who hold back worse off, not just relatively, but in absolute terms. The common pasture will inevitably end up overgrazed to the point of ruin. Many valuable public resources are similarly prone to overconsumption. Roadways become congested, waterways overfished and slices of the electromagnetic spectrum crowded into uselessness, to the detriment of total social welfare.


Now, I hope you can understand how privatization has affected many cities and countries, but we should also consider that privatization is the only way to fast development but as we know the condition of India, in my opinion, we are not ready yet, so we should use the alternatives of privatization.

Thanks for reading

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