essay about benefits and disadvanages of Privatisation
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Answer:
Hi buddy
Explanation:
Privatization is the process of transferring ownership of a business, enterprise, agency, public service or property from the public sector (government) to the private sector or to private non-profit organizations. The term is also used in a quite different sense, to mean government out-sourcing of services to private firms.
Defining Privatization; Pros & Cons of PrivatizationGovernment takes this step whenever any government enterprise does loss continuously or if the enterprise decreases profit alarmingly or if the government thinks the enterprise would cut more profit if it was operated by the private governing body.
This quote is very relevant to understand the importance of privatization:
"Privatization of the state-owned economy is not yet on the agenda. We cannot do it immediately; my colleagues would not agree to it. But we must put all forms of ownership on an equal footing immediately and let different types of ownership compete with the state firms.-" Vaclav Klaus
The following video contains more explanation about the privatization.
Advantage of privatization
Check out some other advantages of privatization for why privatization occurs.
Privatization places the risk in the hands of business or private enterprise.
Private enterprise is more responsive to customer complaints and innovation.
The govt. should not be a player and an umpire.
Privatization provides a one off cash boost for govt. this can be spent on hospitals etc.
Privatization leads to lower prices and greater supply.
Competition in privatization increases differentiation.
Disadvantage of privatization
You may find some government enterprises are not going towards privatization, then you should understand that there are must have some disadvantages too. These disadvantages should also be talked about here. Check out the following.
Privatization is expensive and generates a lot of income in fees for specialist adviser such as banks.
Public monopolies have been turned into private monopolies with too little competition, so consumers have not benefited as much as had been hoped.
The nationalized industries were sold off too quickly and too cheaply. With patience a better price could have been had with more beneficial results on the government’s revenue. In almost all cases the share prices rose sharply as soon as dealing began after privatization.
The privatized businesses have sold off or closed down unprofitable parts of the business and so services.
Wide share ownership did not really happen as many small investors took their profits and didn’t buy anything else.
Okay, here is a twitter comment to understand how people react when it comes to privatization.
However, there are also several reasons for what the government doesn’t give over an enterprise to the private sector even after experiencing loss years after years
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Answer:
advantages:
increased competition
immunity from political influence
tax reductions and job creation
disadvantages:
less transperancy
inflexibility
higher costs to consumers
hope it helps
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