Introduction

Privatization

sate owned enterprises exists in all countries such as developing , developed, market and socialists.
they produce a broad range of goods and services such as electric power, telecommunication, steel
fertilizers automobiles and petrochemicals. the performance of this public enterprises various widely
within and between countries, but their record has frequently been poor, particularly in developing
countries. they have clearly failed to play the strategic role in industrialization that governments had
hoped for. to improve efficiency and competition, governments in industrial and developing countries
alike are divesting their ownership of public enterprises through liquidation which involves the closure
of the enterprise, or the suspension of some or all of its operation, privatization of management using
leases and management contract, or privatization of ownership through the sale of assets to the
private sectors.

Definition of 'Privatization'

Definition: The transfer of ownership, property or business from the government to the private
sector is termed privatization. The government ceases to be the owner of the entity or business.

The process in which a publicly-traded company is taken over by a few people is also called
privatization. The stock of the company is no longer traded in the stock market and the general
public is barred from holding stake in such a company. The company gives up the name 'limited'
and starts using 'private limited' in its last name.

Description: Privatization is considered to bring more efficiency and objectivity to the company,
something that a government company is not concerned about

Definition of Privatization

Privatization is the process of transferring ownership of a business, enterprise ,agency ,public service or
public property from the public sector to private sector.

The business that operates ,for profit or non profit organization.

objective of privatization
 To reduce government involvement in commercially viable activities.
 increase efficiency in the delivery of programs and services
 provides competition in market place which transfer the lower prices and greater choice for
consumers.
 to achieve rapid industrial development of the country
 to make optimum use of resources
 to earn more and more foreign currency
 to increase /strengthen/ industrial management
 to bring dynamism to the financial market and to attract and promote individual private share
holder through the realization of public offers
 To reduce public debt or deficit and to obtain funds.
 to strengthen stock market
Variation of privatization
1. private sector choice for the production of a services
entire responsibility transferred from public to private
2. Public sector choice financing with private sector operations
Joint activity of public and private
3. Deregulation of private firms
Government reduces or eliminates the regulatory imposed on private
Methods of privatization
 share issue privatization
selling entire organization on the stock market
 Asset sell privatization
selling entire organization to strategic investor by auction
 Voucher privatization
distributing ownership to all for free or at lower cost
Sub methods
Contracting out: production of service by private firm under a contract. Under
this scenario, the private sector firm is paid directly by the government.
example
 collection of disposal waste
 other things include security service, data processing services
Franchising : Government awarding a rights to perform services within specific geographic area to a
private firm .the private firm generates revenue by collecting user fees example cable television, gas etc

Open competition: many private firms are allowed to compete for customer within a governmental
jurisdiction. it is not appropriate for some services as it mostly likely would not be efficient to have
multiple suppliers of electricity, gas, or water services. egxample:

 It typically seen telephone and internet provider