Can You Describe The Disadvantages Of Privatization?


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Haider Imtiaz Profile
Haider Imtiaz answered
Following are the disadvantages of privatization:-
1. Surplus employees: The defect of the system is that some of the workers are declared surplus. There is an increase in the rate of unemployment. The unemployed workers commit crimes in this society.

2. No of branches in rural areas: The private bank owners do not like to setup there branches in rural areas. The banking facilities remain confined to cities where sufficient deposits are available. A large part of population will be deprived of banking facilities.
3. Unbalanced growth: The management of privatized banks provides credit in specific areas and people. As a result, there is unbalanced growth in the country; especially rural areas may remains under developed where credit facilities do not exist.

4. Jobs for relatives: The management of privatized banks may provide jobs to their friends and relatives. The deserving persons are ignored.
5. Loans for few persons: The management of privatized bank can extend loans of their favored persons. In this way only few persons are benefited.

6. Owners association: The aim of privatized banks is to earn profit. For these purpose owners associations are made which enter into agreement of earning high profit. The bank can increase the rate of service charges. Such associations may not care for customer's welfare.
Anonymous Profile
Anonymous answered
1) risk of unemployment as firms increase efficiency.
2) mono plies may still exist.
3) profit motive may lead to higher prices.
4) aim is no longer to provide service to all
5) may not take account of social costs and benefits.
6) no longer rely on government for funding.
7) have to make a profit to survive.
8) face competition from other firms.
9) no longer receive profits
10) less control over strategic industries.
11) firms may be sold to foreigners profits go out of country.

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