Privatization is many focused on private companies. It is transferring of government assets or services from the public to the private sector. Government usually transfers this to work efficiently. It’s where government ceases to be a part of the company or business. India recently announced of union budget which is a government’s plan of privatizing every state-owned company in the coming year. Narendra Modi announced that there will be less involvement of government in business, and monetization and privatization will empower Indian citizens, help in the enhancement of infrastructure, and will be economically good. Many countries have gone through a privatization path, such an agenda helps in the enhancement of the company which benefits the customer. On the other hand, critics argue that it may lead to losing jobs, and private companies may charge higher prices. There is no proper privatization plan that has a good fit but there are many success stories and also failures. For example, water privatization took place in JUSCO(Jamshedpur Utilities and Service Company lt.) Is the largest water supplier, it is a flagship company of TATA groups. So, as per the agreement between the TATA group and the government of Jharkhand JUSCO is bound to provide drinking water to the whole town. A political activist told that they cut thousands of people from their basic rights. There are many places in Jharkhand, Shyam Nagar, Balram Basti, etc where water supply is still not regular and some of them don’t have water connections. JUSCO is a private company, the government itself couldn’t help in this situation, they have no control over it as stakes are too low to get in the discussion. Another example is, Hindustan Zinc, the company privatized is good and a successful example. The Atal Bihari Vajpayee- led the BJP government to sell 45% of the stakes of Hindustan Zinc for 765 crores in 2002. The 30% stake government retained was 20,000 crore. This is the second-largest zinc-lead miner company in the world and one of the top 10 silver producers. This shows that there can be failures and successes. It is just a matter of time and plan. Though there are some effects of it faced by common people.
Effects of Privatization in India.
1. The major effect of privatization is private sectors make hold of if and sell products at a very high rate, which can’t be controlled by any government as it’s all privatized. This is the opportunity of bribery and Corruption for private businesses. Private sectors are not privatized. They are not as transparent as the government. 2. When private companies enter the market, their only motto is to earn profit. So, the prices of the products are too high and the purchasing power of all consumers isn’t that high. So, the demand for the products decreases which leads to a drastic change in the economy. 3. Adding to it, Private owners Raise the productivity and decrease the cost, which leads to losses of jobs and wages for workers.
Hope, privatization is considered to bring more growth and efficiency in a company. There are both positive and negative engagement but let’s focus on what’s coming best for us.