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Privatization of Public Sector in India
May 10 2024

Privatization of Public Sector in India


  • The debt burden will be reduced.
  • Increased competition and hence the quality of services will be improved.


  • Unions are arguing that privatization will lead to job losses for those who fall in the reserved categories as the private sector does not follow the reservation policy.
  • Air India has to clear the salaries of staff, privatization will create uncertainties

Privatization of Indian Railway

  • July 2020: India Railways invited private companies to run 151 passenger trains on 109 routes. It was announced that private trains will start in April 2023.

India’s 1st private train is the Lucknow-Delhi Tejas Express (inaugurated in October 2019).


  • World-class trains with better facilities
  • Lesser transit time
  • More safety and security
  • Competitive spirit and can bring more facilities at affordable rates.

Challenges to privatization

  • Privatization can deepen the already existing inequality between rich and poor.
  • With the use of modern technologies, many jobs can become redundant.
  • The government must modify the fees and make the adventure in them


  • Corruption is not dependent on whether it is private or public; it is entirely dependent on the mentality of the individual. However, privatization can help to curb corruption to some extent.
  • The government should lay more emphasis on welfare schemes contributing to the social development of society. The government has the power to impose restrictions on rates, if the prices due to privatization, soar high to unprecedented levels.
  • Privatization leads to job losses to some extent, but if the government is unable to run the entity and if the entity sinks, then it would lead to 100% job losses. If enough jobs are being created in some other sector, then job loss won’t be a major issue.

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