Question

'The Government of India has a plan to privatise a few government-owned companies in the next few years.'

Which of the following statements highlight(s) the impact of such a move?

• A. It will improve the performance of other government-owned companies.
• B. There will be an increase in the number of industrial units in the country.
• C. The products of the privatised company will be available at lower prices and in better quality.
• D. The government will lose the revenue from the privatised companies.

Answer 1

Answer: (A), (D)

The government will lose the revenue from the privatised companies.

Privatisation is the selling of ownership by the government to private players. The government can share the burden of development of industries with the private sectors and focus on the development of other public sector companies and areas of the economy. This improves the performance of other public sector companies. At the same time, the government also loses the revenue from such privatised companies along with the transfer of ownership.