WAT Topics for MBA: Indian economy should be privatized

This essay is on the Topic “Indian economy should be privatized “and will provide inputs for your WAT round.

The term privatization broadly means any process that reduces the state’s dominant role in directly owning and running the economic activities of a nation.  Number of countries with state controlled economies has gone far enough to open the doors of economies to invite private players to achieve faster growth rate.  The craze for privatization has raised manifolds after the ideological defeat and disintegration of the state controlled economy of the socialist bloc.

Generally speaking privatization is a way of altering the relationship between the state and the private sector to enhance the role of the private sector in the functioning of the national economy as a whole.
In a country like India, Privatization in today’s concept is seen as a means of increasing output, improving quality, reducing unit costs, curbing public spending and raising cash to reduce public debt.

Privatization of the economy: Need of the Hour

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 is beneficial for the growth and sustainability of the state-owned enterprises. Following the trend of privatization across the world, the Indian government in the 1990s also introduced privatization amid hue and cry from many of the political and social groups.

To achieve an increase in the output of the country there is a need for privatization at a rapid scale which will help in improving quality of the products by reducing unit costs, curbing public spending and raising cash to reduce public debt.

Privatisation always helps in keeping the consumer needs uppermost, it helps the governments pay their debts, it helps in increasing long-term jobs and promotes competitive efficiency and open market economy. In a rapidly rising economy like India there is a need for the government to realign its priorities in mobilizing the skills and resources of the private sector in the larger task of the development.

Nowadays privatization is being seen as a solution towards the problems of public enterprises as these enterprises on being transferred from the public to the private hands will become less politicized which as a result will help in ceasing the administrative corruption. It will also help n increasing the tax revenues from profits   and strengthening the public treasury.  The advantages of privatization can be perceived from both microeconomic and macroeconomic impacts that privatization exerts.

Conclusion:

Indian economy has a tremendous potential for growth. It has over a period of time shed its inhibitions about privatization by formulating liberal reforms. The economy which used to rise at 3-4% of GDP had steadily registered rising growth to 9.7% after introduction of reforms which were welcome globally.  It is evident enough to highlight the potential of privatization and its need. There is a need for creative and innovative thinking as well as systematic and strategic planning to realize the full potential of privatization.

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