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Byju's Answer
Standard XII
Business Studies
Economic Environment
Statement: Sh...
Question

Statement: Should all the profit making public sector units be sold to private companies?

Arguments:
I. Yes. This will help the government to augment its resources for implementing the development programmes.
II. No. The private companies will not be able to run these units effectively.
III. Yes. There will be a significant improvement in the quality of services.
IV. No. There would not be job security for the employees at all the levels.

A
Only II and III are strong
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B
All are strong
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C
Only III and IV are strong
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D
Only I, II and III are strong
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E
Only II, III and IV are strong
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Solution

The correct option is A Only III and IV are strong
The government cannot sell off public sector units just to pool up funds for development. Besides, if it does so, these units shall be handed over to private companies which are fully equipped to run these units effectively. So, neither I nor II holds strong. Privatization shall surely ensure better services, but private companies adopt hire and fire policy and they are free to terminate the services of any employee as and when they wish to. Thus, both III and IV hold strong.

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