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Impact Of Privatization

Privatization has a positive impact on the financial growth of the sector which was previously state-dominated by way of decreasing the deficits and debts. The net transfer to the State-owned Enterprises is lowered through privatization. Here are some more impact of privatization.

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Impact Of Privatization

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  1. Impacts of Privatization

  2. Privatization Privatization is the process of transferring an enterprise or industry from the public sector to the private sector. For example, if an individual or organization purchases all the stock in a publicly -traded company, effectively making it private, that process is sometimes described as privatization. The term has alternate meanings within business and finances.

  3. Is privatization good or bad? ● As the world economy tends to become one global village, privatization as a policy norm seems to override political compulsions as an instrument for achieving competitive efficiency and resource optimization. ● Privatization will give ample space for creative and innovative thinking as well as systematic and strategic planning to realize the full potential of economy.

  4. ● Privatization in schools and colleges has a positive impact on the education system. And boarding schools in Dehradun and girls boarding school in Dehradun are the best examples of privatization. These sorts of activities will lead to quality education in the country. ● Private companies also cannot list their shares in the stock market and cannot borrow funds from the public.

  5. Here are some positive impacts of privatization in the economy. This helps a country to adopt dynamic version for their growth. Impacts

  6. 1 ● 2 3 ● ● Competitive environment :- Specialization and higher efficiency – No political interference Government or any outside public cannot interfere directly in the private bodies. Therefore, they are not bound to any political party and can perform their activities without getting biased. The introduction of private companies gave tough competition to the old government-owned bodies and therefore, helped to create a healthy competitive atmosphere. As private bodies are not bound to take their decisions after consulting a wide group of people, they can make quick decisions and can maintain a high level of secrecy.

  7. ● Higher Standard of living Privatization provides quality goods and services to the people and therefore, increases the standard of living of people. ● Exports The probability that firms export increases due to privatization, primarily because their attitudes about risks and profits change

  8. ● On Indian Banking SBI enjoys a monopoly of the government business. SBI was formed under the SBI Act in 1955. Thegovernment hold around 93% of the equity, leaving7% to private ownership. By this act the equity of RBIcannot be diluted below 55%. This act was outdated and needs to be re-addressed.However, efforts were initiated by SBI to privatize itsnon – banking subsidiaries like SBI Caps, SBI FundsManagement etc, where SBI’s holding is about 85%of the equity.

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