Advantages And Disadvantages Of Privatization

Despite becoming the second fastest growing and the fourth largest economy of the world, India continues to face large gaps in the demand and supply of essential social and economic infrastructure and services. Rapidly growing economy, increased industrial activity, burgeoning population pressure, and all round economic and social development have led to greater demand for better quality services in Education and Healthcare system. Many analysts argue that the best way to improve service provision is to change the way in which governments administer them in India. For those who believe in neo liberal ideology, privatization is the only way to solve this problem. According to the World Bank, the key task is to ‘manage infrastructure like a business, and not

In the United States, PPPs have traditionally been associated with urban renewal and downtown economic development, In the United kingdom, the Private Finance Initiative (PFI) has become a cornerstone of New Labour’s stakeholder society notion. Osborne (2001) notes that PPPs have become a tool for providing public services through Public Community partnerships, and developing a civil society in post-communist regimes such as Hungary, and a mechanism for combating social exclusion and enhancing community development under European union policy. Therefore it is clear that the PPPs are a family of different possible approaches to providing public sector infrastructure and services. (Hodge 2004:156)

If we judge by the way many governments are currently committing themselves to PPP approach, it is evident that Public Private Partnership (PPPs) has become a popular way of providing public sector infrastructure and services. However the approach to PPPs should be based on the principles, which ensure that PPPs are formulated and executed in public interest with a view to achieving additional capacity and delivery of public services at reasonable