Privatization Basic concept - Printable Version

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Privatization Basic concept - Neeraj Gupta - 12-14-2018

Privatization Basic concept


Privatization - An Economic or Political Process?
Privatization is fundamentally a political process as well as a commercial and economic process 
Privatization changes the distribution of power within a society, as it diminishes control of the economy by the state and government- appointed managers.

What are the goals of privatization?
Macroeconomic goals
- Government's may want to extricate themselves from financial commitments made to PSUs,.and focus scarce resources instead on education, infrastructure, and social welfare.
- to promote the development of the private sector by "leveling the playing field" and ending subsidized competition from state-owned enterprises
- to obtain the sales proceeds and use them to finance shortfall in the government's budget or retire some of the public sector debt.

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