INDIAN ECONOMIC DEVELOPMENT

ABM-203

Topic:“Though Privatisation is important , the role

of the Public sector cannot be ignored “

By : T.Guru Aarat 142063

What is Privatisation ??

• Privatisation refers to the transfer of ownership , management and control of public sector enterprises to the entrepreneurs in the private sector.

• It implies greater role of the private sector in the economic activities of the economy

• Was introduced in INDIA in 1991 as part of the NEP 1991.

Privatisation can be done in 2 major ways :

1. Transfer of ownership

2. Market sale

Why important ??

• Reduction in Budgetary Deficit• Competitive Environment• Quick decision making• Profit oriented decisions• Promotes consumers sovereignty• Increase in Investment• More employment :: More Income

Negatives of Privatisation

• Social welfare neglected • Natural monopoly • Lop-sided economic growth• Lack of transparency• Corruption and illegitimate practices• Widespread unemployment • Inflated prices

Why Public Sectors role cannot be ignored ??

• Rapid Economic Growth• Development of infrastructure • Redistribution of income• Employment generation • Balanced regional development • Direct government income • Compete and keep a check over private sector

Conclusion …

• Thus though Privatisation is very important , the role of public sector cannot be ignored to ensure emphasis on not only economic growth but also to ensure its sustainability and development of economy in a unified and comprehensive manner .

• We can conclude by saying that both the public and private sector are essential for the overall development of the economy .