Privatization and its effect on economy
Privatization refer to selling of government companies, venture, organization to private sector. By this government loses control and authorities from the organization that have been privatized. There can be many reason for that like “financial illness of organization, not effective working of organization and the main reason is to increase the GDP rate of economy. In starting year of independence government was not in favor of privatization so they tried to take hold of every industry in government sector but now table has turned fully. In 1991 reform privatization was started and government organizations was sold to private sector. Government gave authority and power to private sector to open there own form and organization. Now private sector have access to open there start-up in any industry expect some confidential industry such as arm defense, railways. Private sector get bank loan easily to develop a start -up and get many other advantages by government. Government show least interference in private sector. It has made great impact on Indian economy from many past year and will make in future.
Some of the impact of privatization in Indian economy are-
- GDP “gross domestic product “ has increased in a rapid rate after privatization. Production rate has increased which is leading to more demand and satisfaction.
- Money flow in the economy has increased as people has started to invest in new venture and start up, so money flow has increased.
- Now private sector has entered banking sector so banks have increased in the economy so people get start up loan or any loan easily a less rate of interest.
- Private sector was allowed to invest there money so many MNCs entered Indian market so new technologies are always in trending part. People use new latest technology to reduce production cost. New technology was always demanded and will be demanded in future also.
- After privatization many organizations was developed so people got new employment opportunities. Many unemployed was given work which definitely lead to low poverty rate in country.
Kushagra Dhingra BBA TIAS New Delhi