Essay on Privatization

The conversion of government sectors into private sectors is termed as privatization.

There are many sectors responsible for providing different services to the citizens. Some sectors are handled by the government while some are privately owned. Government-owned companies offer great benefits to their workers. But gradually when the government was unable to generate profit from the company, selling the companies to private owners was a good option. This raised the concept of privatization. Today, we will discuss privatization in detail.

Short and Long Impact of Privatization Essay in English

Here, I’m providing short and long essays on Privatization for students of all the classes. However, this topic is also important for students who are preparing for different competitive exams.

Privatization Essay 10 Lines (100 – 150 Words)

1) The transfer of control of sectors from government to private owners is called privatization.

2) Privatization is adopted by many countries like India, the USA, Europe, China, etc.

3) Privatization is good for the development of an organization.

4) Privatization helps in reducing the government burden and maximizing profit.

5) Privatization gives benefits to the rich sections while badly affecting the poor of society.

6) Privatization resulted in the introduction of innovative products.

7) It also helped in reducing unhealthy political interference.

8) However, corruption and bribery represent the black side of privatization.

9) Privatization has turned many people jobless.

10) Unusual price hike is yet another disadvantage of privatization.

Short Essay on Privatization (200 – 250 Words)

Privatization is the process in which public sectors are converted into private sectors. When the government is unable to pay the debt or fail to earn profits from the desired sectors, it is better to sell the sectors to the private owners. Privatization in the world began before the 20th century when Ancient Greece privatized almost every sector. The massive privatization was seen in Nazi Germany after the 20th century. After that many countries like Great Britain, France, Japan, Europe, Latin America, India, etc have suffered privatization.

There can be several reasons for privatization like it can help the government in saving money. Private owners can make a huge profit by running the sectors according to their will. Another reason can be the enhanced quality of products. Through privatization, the efficiency of an organization is also improved. Privatization is a good step for developed countries but it hugely affects the developing countries. Due to the effect of privatization, the rich get richer while the condition of the poor is becoming worse. 

In government sectors, workers enjoy many benefits. There is no pressure or extra workload. But in the private sector, meeting the market competition is the prior requirement and workers have to work hard for that. Other benefits like holidays, bonuses, etc are mainly seen in public sectors. Private sectors need more skilled labor with prolonged working hours.

Long Essay on Privatization (500 – 600 Words)


Earlier in India, all the sectors were owned by the government. Only the government had the charge to make decisions and run different sectors. But due to many reasons, various sectors faced continuous loss and the government found it a good option to shift the power to the private owners. In this way, privatization in India began.

What is Privatization?

Privatization refers to the transfer of sectors owned by the government to private bodies either partly or completely. After the privatization of sectors, all the power goes into the hand of respective owners instead of the government. Privatization helped the government of many countries with their debt. On seeing this, many developing countries adopted it to reduce the burden of the government. However, there can be many reasons behind privatization. Privatization is not a new concept in the world, it has its root several years back.  Privatization has shown various social and economic impacts on the countries.

Advantages/ Pros of Privatization

In many terms privatization is proved fruitful for the countries. Some of them are mentioned below:

1. Increased Competition: Privatization has increased the competition in the market. As a result, sectors are achieving economic development.

2. Innovative products: Due to high competition, every company is trying to serve the customers with their best service and hence they are capable of developing innovative products.

3. Lessen government’s burden: The main advantage of privatization is that the burden of government is reduced. It saves many countries from bankrupt.

4. Free from politics: Since the sector is now owned by private bodies, there is a minimum chance of political interference.

Disadvantages/ Cons of Privatization

Apart from advantages, privatization does have some negative impacts on the countries. Some of them are:

1. Corruption: Private sectors are free to make rules or increase the price by leaving no option for the people. The cases of corruption and forgery are increased in privatization.

2. Unemployment: Due to privatization, companies require highly skilled labor. This cut off the job opportunities of many workers and raised unemployment in the society.

3. Price hike: Due to privatization, companies are free to choose prices according to them. No one including government can do anything in this regard

4. Transparency: Transparency is missing in privatization. Private sectors do not show their motive, process, or other necessary details to the people that were earlier reflected in public sectors.

Impact of Privatization in India

The impact of privatization is both positive as well as negative. Privatization has led to maximizing profit by reducing production costs. Many sectors that are privatized have maximized their wealth when opened to the competitive market. In India, the concept of privatization was raised after independence. From 1991 to 1992, the process of privatization began in India. Countries like France, the United Kingdom, etc showed the profitable result from privatization. However, India received a mixed result. In some cases, privatization proved profitable for India while it also faced opposition from the majority of the population.


Privatization is a matter of concern all around the globe because it has both positive as well as negative effects on the people of the country. However, the effect of privatization varies from country to country. Some countries found it a good way of success and development, while some are fighting against its negative effects. Although we all know that nothing can be proved completely beneficial, it always comes with a price. And so is the privatization.

I hope the above given essay on Privatization is easily understood and will be helpful for everyone to understand its various aspects.

FAQs: Frequently Asked Questions on Privatization

Q.1 Which was the first country to adopt privatization?

Ans. Between 1933 and 1937, Nazi Germany was the first country which privatized most of its state property.

Q.2 Which banks of India are privatized in 2021?

Ans. The privatization of public sector banks began after the announcement made during Union Budget 2021-2022. CBI (Central Bank of India), BOI (Bank of India), BOM (Bank of Maharashtra), and IOB (Indian Overseas Bank) are in the list made by Niti Aayog.

Q.3 Who was responsible for introducing privatization in India?

Ans. Former Prime Minister of India, Manmohan Singh introduced privatization in India.

Q.4 To whom Air India is sold?

Ans. Air India is sold to TATA Groups.