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Where many countries around the globe including India are going through
major economic issues due to pandemic, Modi Government in India has
used privatization as one of the strategies to overcome these crises, under
which 18 sectors are considered as strategic sectors and will undergo
privatization.
Any policy can withstand the cons of it if and only its pillars are strong. Some
of the pillars that form privatization are: -
1) The government will keep the ownership of an enterprise via a contract but
all the daily activities and the services related to the product will be monitored
by private companies.
3) Slowly and steadily private companies will enter the market and displace
the public sector via deregulation. In deregulation, the private sector will see
the public sector as a competitor and ultimately outperform it and hence
displacing it.
Though after all the calculations did by the government, the common question
arises is that will this policy turn out to be in favor of the country or will be a
mistake done by the government.
As it is rightly said that every coin has two sides and every action has an
equal and opposite reaction, it is clearly understood that this policy will also
have some loopholes. But the concern is that are these loopholes big enough
to prove this policy a bane or they are some small pits which can be filled by
other supporting policies and hence turn this policy to be a boon.
2) Interest of the Public: There are some sectors like health care, education,
and public transport in which public interest must be kept over profit.
Privatizing these sectors may not be in the favour of the public.
3) Partitioning of industries: Sometimes privatization may lead to
fragmentation of the service providers according to the area and in such
cases, some areas may be left unattended because of unclear fragmentation.
Now as all the dimensions of privatization are evaluated, on the basis of them,
it is observed that privatization has severe advantages over disadvantages
which are pits and not big holes. Also, Privatization’s impact varies from
industry to industry and the method of regulation, where it is a boon for the
railway industry it may be a bane for the healthcare sector depending upon
the policies applied.