Question : What was the main reason behind the privatization of public sector enterprises in India?
Option 1: Promoting efficiency and profitability
Option 2: Reducing government expenditure
Option 3: Controlling inflation
Option 4: Encouraging worker participation
Correct Answer: Promoting efficiency and profitability
Solution : The correct answer is (a) Promoting efficiency and profitability
The main objective of privatizing public sector enterprises in India was to promote efficiency and profitability. Public sector enterprises, being owned and operated by the government, often faced challenges related to inefficiency, lack of competition, and bureaucratic hurdles. The privatization process aimed to address these issues by transferring ownership and management to private entities.
By privatizing public sector enterprises, it was expected that the new private owners would bring in managerial expertise, technological advancements, and a profit-oriented mindset, leading to improved efficiency and profitability. The idea was that private ownership would incentivize better performance, encourage innovation, and introduce market-driven practices, resulting in higher productivity and competitiveness.
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