Reasons for the privatization

Answer 1

There are many factors which may enhance the growth of the private sector in an economy. The primary reason is the market attractiveness for the investors. If investors find attractive markets then they always try to make their own enterprises which enhance the growth private sector in the specific state. Secondly, it depends on the rules and regulations of the state because private sectors flourish more in the liberal economy. Thirdly political stability and economic indicators also impact the private sector positively. The growth of the private sector in India is attributed to the advanced technology. The government of the state also plays an important role in the growth of the private sector because divestment of the government in the national enterprises enhance the opportunities for private organizations. Moreover, the other major factor which can boost the growth of private sector include low investment costs and no barriers to entry and exit.

Answer 2

Privatization may be done in order to increase efficiency in service delivery. It can also be done in order to improve management and allow citizens to have a stake in the company.