privatization

2. “The transfer of public assets,
operations or activities to private
enterprise”.

3. Privatization was introduced
during the early eighties by
Rajiv Gandhi
The government of PV
Narsimha Rao gave the
actual speed by
introducing the new
industrial policy

4.  Privatization is the process of transferring
ownership of a business, enterprise, agency,
public service or public property from the
public sector to the private sector.
 The business that operates for a profit or
non-profit organization.

5. • To reduce government involvement in
commercially viable activities
• Increase efficiency in the delivery of programs
and services
• Provides competition in market place which
transfers the lower price and greater choice for
the consumers.

6.  Private sector choice for the
production of a services.
Entire responsibility transferred from public to
private
 Public sector choice financing with
private sector operations.
joint activity of public & private
 Deregulation of private firms.
Govt. reduces or eliminates the regulatory
imposed on private.

7.  Share issue privatization
 selling shares on the stock market.
 Asset sale privatization
 selling entire organization to a strategic investor by
auction.
 Voucher privatization
 distributing ownership to all for free or at lower cost.

8. Toll roads, bridges and airport:

9. A significant developments in public private
partnerships is the lease of toll roads, bridges, and
tunnels by state and local governments to private
contractors.
These kinds of deals have previously occurred in
Europe and Australia
Government could not do in 50 add years,
privatization did in just 4-5 years.
The result is we have a great highways and airports.

10. Arms and
ammunition
Indian
Atomic energy railways

11. Chemical fertilizer Cigarettes
Hazardous
Chemicals

12.  Improved efficiency:
Private company have a profit incentives to
cut costs and be more efficient.
Example:British airways
 Lack of political Interference:
Government companies can be motivated by
political pressures rather than sound economic
and business sense.
Example : A state enterprise may employ surplus
workers which is inefficient.

13.  Short term view:
Government may be unwilling to
invest in infrastructure improvements
which will benefit the firm in the long
term because they are more
concerned about projects that give a
benefit before the election.
 Increased competition:
Increase in competition that can be the
greatest spur to improvements in
efficiency.

14.  The private companies don’t like to
have their branches in rural cities.
 Their services remain confined to
cities where sufficient clients are
available.
 Problem of unemployment

15. Aims at high profits which adversely
effect the interest of the community

16.  Market share of privatization is
increasing year by year

18. •It is commonly believed that the private
sector can offer greater performance and
economic efficiency than the public sector, but
in the case of public water utilities this has not
been proven.
•According to various studies, publicly owned
utilities have lower costs than privately owned
utilities.
•Poor people may not afford the cost of water
due to privatization.