Some of you may be of the opinion that all government provided services are of low quality and services provided by private organizations are of high quality. This is not entirely true. Government has to ignore rationality as it does not indulge in business for commercial gains. For example, a bus has to be routed to a village even if there are 10 persons who travel on an average in that village. Would a private organization run such a service? Definitely no. The private organization’s cost-benefit analysis would prevent it from running such a service.
Another ill effect of privatization is that the profits accumulate with a person or a small group of persons who are not bound to redistribute the accumulated wealth for the societal good. I have seen at least three gentleman indulging in insane display of wealth during the last two months. One of them has employed five hundred men and women to serve his family of four in a mansion that houses hundreds of rooms and has a parking space for hundreds of cars. Another gentleman is building a mansion worth 240 crore rupees and yet another gentleman spent 250 crore rupees on his daughter’s wedding which also included a five-seater chopper as a gift for the bride groom. If the same wealth were accumulated by the government, then at least some part of it would have been used for the development of the nation even after accounting for the leakages due to corruption.
Many of the goods and services like food grains, health, education, transport, etc are of utmost importance to our human society. Privatizing such services would pose a greater risk as societal good appears to be at the bottom of the priority list for private enterprises. Many a times, corporate social responsibility is also planned in such a way that if furthers the interests of the company. In such a scenario, the governments of the day should think of strengthening the public services, rooting out corruption and enable public enterprises to provide world class services (like Delhi metro). We should not think of privatization as the panacea for all the ills that exist in the delivery of public services.