Impacts Of Privatisation/Disinvestment In India | Selling PSUs | Explained By Sumant Singh

#Privatisation #Disinvestment #Budget2021

In This Video, I've Explained The Potential Advantages And Disadvantages Of Privatisation In India And How It Could Impact People Of India, Negatively Or Positively.

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Music: Eternal Garden - Dan Henig

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Overview:

Privatization in India is still at a minimalist level. Privatization by way of sale of public sector enterprises is almost negligible while divestment is also existent by way of selling of a portion of shares of the 31 public sector enterprises. Privatization got tremendous boost by the introduction of new economic policy in 1991 that allowed delicensing, relaxing entry restrictions and equity funding. This heightened the competition in the industries that were monopolized by the public sector earlier. State owned enterprises were lacking the finesse that private enterpriseemployed as the competitive edge. Deregulation in India was facilitated by laws like the Industries (Development & Regulation) Act, 1951 (IDRA), Monopolies & Restrictive Trade Practices Act, 1969, (MRTPA), Foreign Exchange regulation Act, 1973 (FERA), Capital Issues Control and technical scrutiny by the Directorate General of Technical Development (DGTD) (Goyal, n.d.). Post-independence, the Indian government adopted socialistic economic strategies. It was in 1980s, that Rajiv Gandhi initiated economic restructuring. With the help of IMF, Indian government commenced a sequential economic reorganization. P.V. Narasimha Rao brought in the revolutionary economic developments with the help of Dr. Manmohan Singh. The results of these reforms can be assessed statistically by comparing the total overseas investment in terms of portfolio investment, FDI and investments from foreign equity capital markets. In 1995-96, it was $5.3 billion as compared to $ 132 million in 1991-92. The highlights of the reforms including eradicating license raj for all except 18 critical sectors for licensing; tempering the control on industries; Foreign Technology Agreements; FDI & FII; amendment of MRTP Act, 1969; Deregulation; Regulation of Inflation; Tax restructuring; encouraging overseas business relations.

ADVANTAGES OF PRIVATIZATION

A. Microeconomic advantages:
• State owned enterprises usually are outdone by the private enterprises competitively. When compared the latter show better results in terms of
revenues and efficiency and productivity. Hence, privatization can provide the necessary impetus to the underperforming PSUs.
• Privatization brings about radical structural changes providing momentum in the competitive sectors.
• Privatization leads to adoption of the global best practices along with management and motivation of the best human talent to foster sustainable competitive advantage and improvised management of resources.

B. Macroeconomic advantages:
• Privatization has a positive impact on the
financial health of the sector which was previously
state dominated by way of reducing the deficits and
debts.
• Helps in escalating the performance benchmarks of the industry in general.
• Can initially have an undesirable impact on the employees but gradually in the long term, shall prove beneficial for the growth and prosperity of the employees.
• Privatized enterprises provide better and prompt services to the customers and help in improving the overall infrastructure of the country.

• DISADVANTAGES OF PRIVATIZATION
Privatization in spite of the numerous benefits it
provides to the state owned enterprises, there is the
other side to it as well. Here are the prominent.

Disadvantages Of Privatization:
• Private sector focuses more on profit
maximization and less on social objectives unlike public sector that initiates socially viable
adjustments in case of emergencies and criticalities.
• There is lack of transparency in private sector and stakeholders do not get the complete information about the functionality of the enterprise.
• Privatization has provided the unnecessary support to the corruption and illegitimate ways of accomplishments of licenses and business deals amongst the government and private bidders. Lobbying and bribery are the common issues tarnishing the practical applicability of privatization.
• Privatization loses the mission with which the enterprise was established and profit maximization agenda encourages malpractices like production of lower quality products, elevating the hidden
indirect costs, price escalation etc.

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[SumantSingh]

Which background is better, old one or this one?

[Ravi_yadavsaab]

निजीकरण लोकसभा और राज्यसभा का भी हो जाए तो बहुत अच्छा होता

[sushillakhara]

सरकारी को privatization करने की बजाय सरकारी system को सुधारने की कोशिश करनी चाहिए और
सरकार चाहे तो ऐसा कर सकती है

[tabzeelahmad]

1 Sarkar hoon Main
2 Mera beta Sarkari Company
Aur 3 Dost ka private company

[technicalaryan]

Complete explanation like always gd job keep it up.. thoda fast bolo slow video hai sb best hai.

[SaurabhSingh-qthw]

Tum jara ik baar bsnl ka ka net lagao tab samjh jaoge

[SaurabhSingh-qthw]

To America me to sab private hai ke nahi sab desh private company hai kee nahi kaha sarkkari kahli apne yaha hai sab chij mee

[sundarmohan]

Lok sabha rajya sabhako privaisation ho to koi mantri wanha bematlab nahi fekega

[prakashdhabhai]

Bhai khush bhi yaar
Privatisation se main nuksan ye hai ki tum logo ko kam krna padega
Gov se itna hi lagav hai to apne baccho ko gav school me bhejo, gov hospital me Jaoo,
Tum logo ko jha fayda hota hai waha gov or baki me sb private

[meditationsilence]

Its bad for country and people
Chanakya said that govt should take less tax and increase income of state and of people