Monday, February 09, 2015

Changes in Public Administration due to Privatisation Movement

Ques. 24. What according to you are the most important changes brought into public administration by Privatization movement.

Ans. LPG was adopted in India in 1990 and after 1980 many economies of the World including erstwhile USSR and China adopted the path of privatization.

Privatization has many effects maximum of which are on the positive side and some of the negative side. They are as follows – 

(1) Privatization which is a sort of transformation from socialistic pattern to capitalistic pattern increases efficiency in public administration and leads to reduction in Red Tapism.

(2) After privatization the job of Government was reduced drastically and was limited to heavy capital investment projects which were not viable for the private sector. For eg. Roads, Railways etc. In less capital investment sectors the Government job was of a regulating nature.

(3) Privatization lead to improvement in economy which lead to increased earning of Govt. which were utilized for welfare of the downtrodden thereby improving Public Administration

(4) Functioning of Govt. owned PSU improved as they were dis-invested and some amount of their control led into private lands.

(5) Due to foreign and domestic players operating in the same field competitiveness increases and prices and choices for consumers decreased and increases respectively.

(6) Due to complex market forces, Bureaucracy and Govt. is on its heels to check if some negative practices are going on because privatization as a phenomenon has its own cons.

(7) As Privatization relies more on the doctrine of Public Choice Approach the individual role increases and Govt. role decreases.

So privatization is good for Public Administration with effective checks in place.

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