Essay on Growing Trends of Privatization

Growing Trends Of Privatization

The news regarding the privatization of different sectors in India is known to every one of us. The Indian government has initiated a fast pace of selling different government companies and thus this is increasing the concept of privatization in the nation. Have you ever thought about why privatization is taking place in the nation? What is the purpose of privatizing different government sectors in the nation? How will the people and the economy of the nation be benefitted from this concept? There are several questions in our mind related to the Privatization (Growing Trends of Privatization) that is happening in different government sectors.

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10 Lines Essay on Growing Trends of Privatization

1) Privatization is the process of shifting the management and control of public sectors to the private sectors.

2) In the 1930s, the word “Privatization” was introduced by an international weekly newspaper “The Economist”.

3) Privatization reduces the job responsibility of the government.

4) Many government sectors are converted into private sectors.

5) Today, many countries have undergone privatization.

6) Private sectors have their own rules and regulations.

7) Privatization leads to increased market competition.

8) Privatization would be beneficial for the rich people.

9) Privatization helps in the development of a country.

10) Privatization is fruitful for developed countries, not for all developing countries.

Long Essay on Growing Trends of Privatization

This topic is very important from the competition perspective. I have provided an essay that contains elaborated information on this topic. I hope that it might be an aid to all the students and readers in learning about this topic and getting their questions answered.

2000 Words Essay-The Evolution of the Concept of Privatization


Privatization is a trending concept in the developing nations of the world at present. The Indian government is selling different public sectors of the nation. Everybody in the nation has their own views and opinions regarding the concept of privatization (Growing Trends of Privatization). Many believe that this step to be a boon for the development of the nation while many have the opinion that in this way the government is selling India. We will be discussing this concept in the essay given below.

What is meant By Privatization?

Privatization is the process of the transfer of the management and control of the government sectors into the hands of the private sector. In this way, the government gets rid of the responsibility of the public sectors in the nation. Privatization literally means that the stake holding of the private sector in the government company will be more than 51 %. This in turn reduces the burden and responsibility of the government. The concept of Privatization was most popular in the developed countries and at present the same concept is being utilized by the developing countries of the world.

An Account on the Trend of Privatization in the World

The Scenario of Privatization Before the 20th Century- The evolution of the concept of Privatization had evolved from Ancient Greece. The government over there gave the control and management of everything into the hands of the private sector. It is stated that every type of work in the Roman Republic was managed and done by private individuals or industries. This was believed to be the major cause of the failure of the Roman Empire. The concept of privatization was also practiced in China and Europe and was prevalent till the industrial revolution. Thus, we can state that Privatization (Growing Trends of Privatization) was limited to a few countries before the 20th century.

Status of the Concept of Privatization After the 20th Century- The scenario of privatization changed after the onset of the 20th century. This concept became more popular and gained worldwide attention during the year 1980’s. It showed a growing trend in different nations of the world. The status of some of them is enlisted below:

  • There was enormous privatization of the government properties of different sectors during the 1930’s in Germany.
  • The steel industries in Great Britain were privatized at large scale during the 1950’s.
  • Massive privatization took place in the United Kingdom during 1980’s. It included Britoil, Amersham International, British Telecom, British Petroleum, British Aerospace, British Gas, Rolls Royce, Rover Group, British Steel Corporation, etc.
  • The concept of privatization was enhanced in America during the 1980’s and 1990’s. The sectors of transportation, telecommunication, and water management were given in the hands of the private sector.
  • The concept of privatization also flourished in eastern and western Europe during 1990’s.

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Needs of Privatization

  • Efficient Services to the Public

The government companies are controlled and managed by the government and thus they have no fear of losing their position in the market. They have average or above-average production. Private companies always try to do something better so that they may have a good ranking in the market. They do their best to produce products that are according to the expectation of the customers otherwise they will have to incur a severe loss in the market. Therefore, in order to provide better services to people there is the need to privatize the government companies.

  • Good Customer Services

We have often noticed that it requires much time for any work to be accomplished in the government sector. We need to visit offices several times so that it can be done on time. The government officials have a very lazy attitude and do not like working, which leads to delay in the work. This is not the condition in the private offices. They provide good responses and accomplish the work timely and thus this is a valid reason for privatization to take place.

  • To cure Sick Public Sectors

There are many public sector units that are at loss and thus they are referred to as sick public sector units. The government has to give money to these sectors for reviving these sectors. This causes a fiscal deficit in the financial budget. Thus the government thinks that privatization is the solution to this problem and will help in incurring the loss.

  • To Increase Competition in Market

 According to the government, the privatization of the government-owned units will make them more efficient and thus they can compete with the other growing industries in the market. This will help in enhancing the quality of products along with earning good profit.

Privatization in India

Privatization of government-owned sectors in India is the burning topic of discussion at present. These discussions are obvious because of the news that was telecasted that the government has decided that all the public sectors will be privatized soon. All the Public sector units have to be privatized according to the budget 2021-22 released by the government. These sectors have been ranked in the sequence of sales by the government of India. 18 sectors in India have been recognized for strategic sale. It includes Atomic energy, space and defense, transport and telecommunications, power, petroleum, coal and other minerals, banking, insurance, and financial services.

Rising of the Concept of Privatization in India

India after getting independence in 1947 had established several public sector units. The government never gave way to any of the private sectors to interrupt the economy of India. This trend was executed in the nation for years. The Indian economy was greatly affected after 1980’s and thus it started decreasing at a faster rate. The nation was undergoing a financial crisis. This led to the initiation of LPG reforms in the economy of India in the year 1991.

LPG stands for Liberalization, Privatization, and Globalization. This reform was instituted by our former Prime Minister Manmohan Singh. This opened the economy of India to the private sectors worldwide. These reforms have also led to foreign investment and attaining global recognition.

LPG reforms had helped in enhancing the economy of India. The initiation of this reform has fostered economic growth in the nation. The employment opportunities increased in the nation that further resulted in decreasing poverty in the nation. The GDP of the nation also increased from 5.7 % to 6.5%.

Structure/Forms of Privatization in India

There are several methods of privatization that have been adopted by the government of India for the privatization of the government-owned sectors. These methods are enlisted below:

Delegation- This method states that the government in the form of lease, contract, or franchise consigns the responsibilities of the company to the private sector. The private sector is responsible for handling daily work and ensuring good services but the responsibility of managing and controlling is in the hands of the government.

Divestment- In this method, the government sells the maximum percentage of shares to private enterprises. The government still has some stake holding in the firm so that it may involve itself in the decision-making process of the company.

Displacement- The private company slowly and gradually acquires the public sector and ends the role of government from those.

Disinvestment- It refers to the sale of the public sectors to the private sectors so that the loss can be prevented. Every disinvestment is not complete selling of the public sector unit.

Examples of Some Privatized Companies in India

  • These companies have been privatized under a disinvestment policy that states that some have their control in hands of the government while others are managed and controlled by the private sectors. Bharat Aluminum Co. Ltd., Hindustan Zinc Ltd., Hotel Corp of India Ltd., Indian Petrochemicals Corp. Ltd, IBP CO. Ltd., Lagan Jute Machinery CO. Ltd., Tata Communications Ltd.

Benefits and Drawbacks of Privatization

People all around the world and India have different views regarding the concept of privatization. Some consider it important for the welfare of the nation and people while others have their opinion against this process. Here we will be discussing the advantages and disadvantages of privatization in the nation and world.


  • The efficiency of the sick public sectors gets fostered when they are controlled and managed by the private industries.
  • The performance of the employees increases that aids in the growth rate of the firm.
  • The private sector is free to perform in any way it wants as it has no government or political interference like the government sectors.
  • Privatization improves the condition of sick public sector units thus making it prepared for healthy competition in the market with other top-ranking companies.
  • Privatization helps the government companies in earning a good profit and that will be a boon for the people as well as enhance the economy of the nation.
  • The innovative methods acquired by the private firms help in developing new schemes and offers that would attract customers.


  • Private sectors mainly focus on earning a good profit rather than thinking socially and working for the welfare of the people as Public sectors do.
  • Corruption and businesses in unlawful ways are common in Private management. They can adopt any of the corrupt ways to get benefited with surplus profit and be in top ranking.
  • The price of the products may rise after the private ownership and the customers have no option other than buying the costly items.
  • There is no transparency in the work of the private sectors as they are not bound to show the details of every work to the government as done by the government sectors.

Is Privatization Good or Bad For the Indian Economy?

The Public sector companies were basically established after the independence in India with a socialistic view. They were not developed for earning surplus profits in the nation but serving the public welfare of the nation. The recent agenda of the government to privatize the Public Sector Undertakings is a difficult situation for the entire nation. These government entities are termed as the assets of the nation and selling these into private hands is not a good decision according to me.

Privatization is not a bad aspect but is not the solution to every problem. There are some other ways that can foster the growth of sick government companies in the nation. A proper assessment is required to know when privatization is necessary and when it is not. This concept is good for the developed countries of the world as almost every section of society in such countries is having a good income. The drawbacks of privatization will not affect anyone negatively. Privatization is not a better concept for a developing country like India because people in the nation are divided into different classes according to their earning or income. Everybody in the nation does not have equal income and status in society. Thus, privatization (Growing Trends of Privatization) can have negative effects on the weaker sections of society in India. This will greatly affect the development and progress of the nation.

The Decision of the current Government to Put all PSU’s on Sale- Recently the decision of the Indian government to sell all the PSU’s along with ONGC and Bharat Petroleum Ltd. in 2019 is not good. The monopoly in the oil sector in the future would create an imbalance in the economy of the nation. Moreover, the entry of private sectors in healthcare and defense sectors will lead to a hike in the cost of services. This will not be a good decision for the welfare of the people of the nation. According to me the concept of privatization (Growing Trends of Privatization)must only be done in the sectors where certain rules and regulations can be formulated and executed. This will help in reducing the drawbacks of privatization.

Essay on Growing Trends Of Privatization


Privatization has been a general trend in the developed countries of the world like the United Kingdom, USA, France, Europe, etc. The economy has also increased in these countries because of the adoption of different forms of privatization. The method of privatization is now growing in developing countries to make the nation a globalized one. Although privatization has become a trend in the world, there are people all around the world who are unsatisfied with the concept of privatization of the government sectors but could do nothing to save them.

FAQs: Frequently Asked Questions on Growing Trends of Privatization

Q.1 When was the economic reform initiated in India?

Ans. The economic reforms were initiated in India in 1991.

Q.2 What is the main vision of Privatization?

Ans. The main vision of privatization is to make the government sector more efficient in working.

Q.3 When did privatization begin in the world?

Ans. Privatization started in the world in Nazi Germany during the 1930s.

Q.4 Which was the first government company of India to be privatized?

Ans. Indian Telephone Industries was the first company to be privatized in India.

Q.5 What is the name of India’s first private train?

Ans. Tejas Express operated by IRCTC is India’s first private train.

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