Those public sector undertakings which are making profits should be privatized. Do you agree with this view? Why? | Learn NCERT solution | Education portal Class 11 Indian Economic Development | Study online Unit-3 Liberalisation, Privatisation and Globalisation



Q.9:- Those public sector undertakings which are making profits should be privatized. Do you agree with this view? Why?

 

Answer:-

The PSUs which are making profits should not be privatized because they are revenue generator for the government. But if a PSU is an inefficient and loss making one, then the same PSU exerts unnecessary burden on the government’s scarce revenues and further may lead to budget deficit. The loss making PSUs should be privatised. Further some of the PSUs like, water, railways, etc. enhance the welfare of nation and is meant to serve general public at a very nominal cost. Privatisation of such important PSUs will lead to loss of welfare of poor people. Hence, only less important PSUs should be privatised while leaving the core and important PSUs to be owned by the public sector. Instead of privatisation of profit-making PSUs, government can allow more degree of autonomy and accountability in their operations, which will not only increase their productivity and efficiency but also enhance their competitiveness with their private counterparts.