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[puru22]

Some countries are handing over public services such as hospitals,
railways and education to private companies to be run for commercial
profit. Are governments justified in letting private profit manage the
public interest?


Ans:

Governments in the modern world are increasingly privatizing the public service utilities to operate them in an efficient and effective manner. However, this has brought forth some serious concerns on the process.

Critics argue that the objective of serving the people may be lost by the privatization. The greed for higher profit or private companies has increased the cost burden on the consumers. For instance, privatization of electricity transmission and distribution has substantially increased household’s electricity cost.

Another important reason against privatization is the government is expected to provide the utilities as free or at reasonable cost. The citizens deserve to be taken care of for their ever rising tax payments to the government.

Nevertheless, the benefits reaped from private sector participation are too large to be ignored. Firstly, the quality service have considerably improved. We all have seen the hif quality in private health care services. Secondly, lack of bureaucracy enables such organizations to operate in an cost efficient manner. Thirdly, the fear of backlash from the government and the public at large ensures that the private sector is accountable for the quality of services.

As far as the question of profits realized by such commercial entities is considered, it not really a weakness. The profit has been responsible for the keenness of a large number of individuals in taking up the public service initiatives. Further, the increased competition ensures costs are maintained at reasonable levels.

I strongly believe that the public utilities can do a better service to a country in the hands of private sector. The concerns raised by critics can be addressed by governments through setting up regulations and their effective reinforcement.