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Privatization |
Globalization |
| (1) Meaning |
It refers to reduce the involvement of state or public sectors by involving of private sector in economic activities. |
It refers to integration of national economy and societies through cross country flows of information, ideas technologies, goods, services capital, finance and people. |
| (2) Aim |
It aims at promoting efficiency, increase productivity, profitability. |
It aims at promoting world trade and economic growth by integrating technologies, goods, services, people, etc. |
| (3) Need |
To achieve quick and logical business decisions aimed at commercial success of organisation. |
To overcome the problem of declining domestic demand and to ensure free trade. |
| (4) Measures adopted |
Reduction in number of industries reserved for public sector, disinvestment of shares, improvement in performance through MoU. |
Allowing Foreign Direct investment, approving foreign technology, amendment of patent laws, etc. |
| (5) Benefits to Host Company |
It results in profitability, production of superior quality products and services, self motivation etc. |
It results is expansion of investment. It promotes foreign trade and brings foreign exchange |
| (6) Benefits to Consumers / Traders |
Entry of private sector results to competition thereby providing high quality goods and services at lower prices. |
Consumers gets variety of goods as option to be purchased foreign technology is adopted by traders thereby increasing growth of production. |
| (7) Positive Effect |
Improved performance, high quality goods and services in market. Timely prompt decision with more efficiency. |
It results in increase in foreign trade, inflow of foreign trade, inflow of foreign technology and capital, which increases employment opportunities, business growth, etc. |
| (8) Adverse Effect |
Growth of monopoly, inequality of income, lack of social responsibility, etc will hamper the social order of the economy. |
It leads to exploitation of home market by foreign companies. Capital intensive techniques leads to reduction in job opportunities. |
| (9) Inter Relationship |
Privatisation is a part of the process of globalization. |
Globalisation includes liberalisation and privatisation. |
