Short essay on Privatisation of Public Utilities

As the public utility undertakings are engaged in the supply of essential services to the community, their functions have been regulated and controlled by the public authorities. Public utilities deal with public amenities like water, electricity and transport. The supply of these essentials improves grate responsibilities on the producer.

The services should be of high quality and they should be supplied regularly. In case of public utility we find stronger case of public ownership and management than other industries, since these are concurred with supply of indispensable products and services and touch the economic, social and political life of the people at many points. As they are provided with monopoly powers, they are tempted to exploit the community.

In the early 90’s, tremendous boost was given to chronic liberalization. From early 2000 globalization has become a ‘Mantra’. Privatization has played a significant role. This can be seen because of the disinvestment policies adopted by the Government.

By privatization of public utilities, following doubts arise in the minds of public.

1. Whether social justice can be there / adopted?

2. Whether monopolization power lead to exploitation of the masses?

3. Whether continuous supply of essentials can be provided?

4. Whether quality can be maintained?

5. Whether private enterprises can gear up to meet the demand?

6. Do they have the required resources?

7. Do they have the required infrastructure?

8. Last but not the least, do they have the will to undertake the services?

For majority of the doubts raised, the answer will be ‘Yes’. This is done to reason that private enterprise have made an in all the fields of activities and have performed well. In countries like USA and UK public utilities are well managed by private organizations.

In India the scenario may be different, because majority of the population live under the poverty line. They must be at least provided the basic amenities to carry on a quality life. Privatization definitely will be a boon because of enormous human resources expertise financial resources, discipline the private enterprise has.

On the contrary, ‘wealth maximization’ and ‘profit maximization’ is the ultimate object of a private enterprise, with little impetus on social responsibilities. Therefore they may not venture into areas which are not profitable and places which are thinly populated due to the enormous initial investment to be made. The revenue generation may not also be upto their expectation as they have to follow the principles of equity and ‘Mental justice’.

Therefore the best arrangement will be to allow

1. Government to mend the affairs of public utilities.

OR

2. Government and private participating in the management of the affairs of the public utilities.

The above two alternatives will take care of the of the public and provide a planning to serve the masses better.