Question

In your opinion, what are the advantages of privatisation to the economy?

Answer 1

Advantages of privatisation are:
(i) It will introduce efficiency and profitability in public sector undertakings (PSUs)
(ii) It promotes consumer's sovereignty. High degree of consumer's sovereignty implies wider choice and better quality of goods and services.
(iii) It will reduce budgetary deficits which result from expenditure on loss-making PSUs.
(iv) It promotes the diversification of production. Also, unlike PSUs, private enterprises invariably generate high profits.