What are the advantages and disadvantages of privatization?

Answer 1

Advantages:

1. Basic advantage in privatization is accurateness and commitment towards the service as they private organizations are very much concerned about the profits they make ultimately which depend on the quality of service being provided by them and the public response to it.

2. Privatization generates more revenue compared to government enterprises, thus govt can indirectly earn a bit more by leasing out enterprises to private organizations.

3. Customer support and satisfaction basically is of much interest in private enterprises comparatively.

Disadvantages:

1. The biggest threat is reliability. There is nothing that backs up the private organizations, where as govt can back up its enterprises easily in terms of funds. There are more chances of bankruptcy in private orgs where are 0 to few in govt orgs.

2. Though the quality of service may be little compromised, its reliable.

3. Some departments need social responsibility which can be done only by government like police department, traffic management.