Those public sector undertakings which are making profits should be privatised. Do you agree with this view? Why?
An efficient and profit earning PSU is a revenue generator for the government. But if a PSU is an inefficient and loss making one, then the same PSU exerts unnecessary burden on the government's scarce revenues and further may lead to budget deficit. The loss making PSUs should be privatised whereas it would not be fair to privatise a profit making PSU. Privatising a PSU may lead to concentration of monopoly power in the private hands. Further some of the PSUs like, water, railways, etc. enhance the welfare of the nation and are meant to serve the general public at a very nominal cost. Privatisation of such important PSUs will lead to loss of welfare of poor people. Hence, only less important PSUs should be privatised while leaving the core and important PSUs to be owned by the public sector. Instead of privatisation of profit-making PSUs, the government can allow more degree of autonomy and accountability in their operations, which will not only increase their productivity and efficiency but also enhance their competitiveness with their private counterparts.
Match the following:
|
1. Prime Minister 3. Quota 4. Land Reforms 5. HYV Seeds 6. Subsidy |
A. Seeds that give large proportion of output C. Chairperson of the planning commission D. The money value of all the final goods and services produced within the economy in one year. E. Improvements in the field of agriculture to increase its productivity F. The monetary assistance given by government for production activities. |
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An efficient and profit earning PSU is a revenue generator for the government. But if a PSU is an inefficient and loss making one, then the same PSU exerts unnecessary burden on the government's scarce revenues and f...
Step-by-step explanation:
• An efficient and profit earning PSU is a revenue generator for the government
• But if a PSU is an inefficient and loss making one, then the same PSU exerts unnecessary burden on the government's scarce revenues and further may lead to budget deficit
• The loss making PSUs should be privatised whereas it would not be fair to privatise a profit making PSU
• Privatising a PSU may lead to concentration of monopoly power in the private hands
• Further some of the PSUs like, water, railways, etc
Students often lose marks by skipping steps, writing incomplete explanations, or misunderstanding keywords used in the question.
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