Reduction in the role of public sector is due to __________a)Political Environmentb)Privatisationc)Globalisationd)LiberalisationCorrect answer is option 'B'. Can you explain this answer?

Question

Answer

Privatization means conversion of public sector enterprises into private ownership by selling the shares of the company to private person or an organization, which means the shares cannot be sold to the public.
As the control and management transferred to private ownership, the role of public sector is reduced.

Answer

It's due to privatisation as privatisation means giving greater importance to private sector rather than public sector

Answer

Privatisation
- Privatisation refers to the transfer of ownership and control of public sector enterprises to private individuals or companies.
- One of the main reasons for the reduction in the role of the public sector is the widespread trend of privatisation that has been witnessed in many countries around the world.
- Privatisation is often driven by the belief that private enterprises are more efficient and effective in delivering goods and services compared to public sector entities.
- The process of privatisation aims to increase competition, improve service quality, reduce costs, and stimulate economic growth.
Impact on Public Sector
- As more and more industries and services are privatised, the role of the public sector diminishes.
- Public sector enterprises that were once responsible for providing various services such as telecommunications, transportation, and energy are now being taken over by private companies.
- This shift results in a reduced role for the public sector in the economy, leading to downsizing, restructuring, or even complete shutdown of public sector entities.
Reasons for Privatisation
- The decision to privatise public sector enterprises is often driven by the need for efficiency, cost-effectiveness, and innovation.
- Privatisation can also help in reducing the burden on government finances by transferring the responsibility of running enterprises to the private sector.
- Additionally, privatisation is seen as a way to promote competition, increase productivity, and foster economic growth in the long run.
Conclusion
- In conclusion, the reduction in the role of the public sector is primarily due to the process of privatisation that has been adopted by many governments worldwide.
- While privatisation has its benefits, it is essential to strike a balance between the public and private sectors to ensure that the interests of the public are adequately protected.

Answer

Privatization means conversion of public sector enterprises into private ownership by selling the shares of the company to private person or an organization, which means the shares cannot be sold to the public.
As the control and management transferred to private ownership, the role of public sector is reduced.

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