why is government giving more preference to the privatisation? Explain with 4 reason
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Answer:
Governments take privatization stance to reduce its burden in terms of underutilization of resources, over and redundant employment, fiscal burden, financial crises, heavy losses and subsidies in order to improve and strengthen competition, public finances, funding to infrastructure, and quality and quantity of services in terms of management. Study used a comprehensive approach to explore all the reasons of privatization and categorising them based on past literature. Categories formulated are accounting reasons, economic reasons, political reasons, social reasons, motivation from public vs. private ownership differences and incentives of post privatization performance. Moreover the role of government in post privatization arena has prime importance without which the desired objectives can't be achieved. Based on the study it can be inferred that it is not necessary that a country opt privatization based on all the reasons but surely pick one or more from them. Post privatization performance of the previously SOEs is the prime motive behind it. However economic reasons also take part in privatization with same magnitude.
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