Advantages of Privatization

Advantages of Privatization

Advantages of privatization are Liberalization of economy, improved product & services, efficiency & productivity, more profitability, and more income for the Government, no political pressure on decision making, end of bailout packages.

1.    Liberalization of Economy

Liberalization of economy is one of the main advantages of privatization. Liberal economy would provide equal opportunity to all parties. Liberal economy would also promote the competition in the economy.

2.    Improved Product & Services

Privatization would improve the competition, and such competition will bring improved services & product to the society. Such competition would reduce the prices of products for the customer.

3.     Better Efficiency & Productivity

Other advantage of privatization is improved efficiency & productivity. It is important to note that organization running under government supervision & control normally has lower productivity for several reasons.

4.    More profits

Privatization of government owned organization will introduce the culture of profitability within organization. Most public organizations normally incur heavy losses, because government objective is not profit maximization.

5.    Income for Government

Privatization would also improve the government income, because the losses making companies are not paying taxes on the profits. Government can utilize this increased income on public welfare projects.

6.    No Political Influence

Privatization will introduce the culture of professionalism within organization and now decision shall be made on business logic without any political influence & pressure.

7.    Finish Bail Out Packages

Public organizations need bailout packages every now and then to finance their heavy lose. With the help of privatization, these packages can be eliminated, and government funds can be utilized more effective way.

8.    Innovations & Advanced Technology

Privatization may bring advanced technology to the public organization. Businessman or investor is more interested to use new methods of productions to improve productivity.