Question :
The transfer of government services or assets to the private sector is referred to as privatization. The most common method is to sell the stocks of government-owned companies thereby diluting their ownership and control over them. Private sector units are influenced in an area that generates more revenue and profits for them.
Which of the following, if true, would strengthen the argument that "Is Privation Bad for India"?
1. Privatisation removes the bureaucratic and red tape barriers that prevent organizations from reaching their full potential.
2. Privatization might lead to the breaking up of one giant company into several other rather small enterprises. This fragmentation ultimately decreases the efficiency and also reduces the accountability in the management.
3. Privatization of a Public Sector Undertaking can increase efficiency as private enterprises are more profit-oriented than the government.
4. Transferring the authority of a government-run company into private hands means that more free hand is given to the management, who can now make commitments for long-term gains.
5. Privatisation could be an instant mode of revenue generation for the government looking for funds for investing in some project or welfare scheme.
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