Introduction:

 

In this competitive age, many countries in the world facing a number of crisis and lack in concentration of creating their economy due to the cross-border terrorism, unstable in political environment, poor utilization of wealth resources, boost in population and poor concentration on agriculture. Such causes led these countries to be in struggle to take immediate and remedial measures to develop their economy and to satisfy the society. The basic economy structure of the country might drastically differ from each other since of imbalance in their regulation of organization and other activities. In order to eliminate such obstacles, the world trading organizations discovered the new dimensional policies to maintain the balance between the countries in trading and other activities. These policies usually called as LPG policies such as Liberalization, Privatization and Globalization. The primary objectives of these policies is not only to offer and maintain the equality in business and other activities but also to make standardize in the function and satisfy the global consumers.

 

Today, the policy of privatization became significant role in the development of each and every country’s economy. Brian Atwood (1995) opined, “Privatization ultimately involves power-and equity-and not just equity in terms of ownership, but social equity, the fundamental fairness and openness of society.” Privatization policy is now created successful and tremendous development in various sectors. Specifically in service sectors its contribution is unlimited 1. The service sectors such as transport, insurance, tourism, banking, telecommunication, hospital and public utility, etc. had a major impact by the privatization policy. The main scope and impact of privatization in these service sectors is the outcome of the powerful service to the society at reasonable cost. So with the above view the author is attempting to present the impact of privatization policy created remarkable modifications in the growth and development of these service sectors and rewards over them based on observation and review of relevant literature.

  Privatization: A dimensional idea

J.A. Kay and D.J. Thompson (1986) stated, “The privatization is utilised in a considerably wider then sense to cover a number of distinct relationships between the government and the private sector such as de-nationalization (sale of public assets), deregulation (introduction of completion into regulated sectors), and contracting out (franchising to private firms of state financed goods and services). The key concept of the above definition is that privatization is transformation of governance of public sector to the private operators.

 

 

 

 

 

Dramatic growth of privatization in a variety of sectors:

 

Throughout the last couple of years, the privatization policy becomes substantial and dramatic growth and development in the field of numerous sectors. Especially, the field such as agriculture, finance, infrastructure and industry are achieved higher level of revenue. P.G. Babu and Nibedita Das (1999a) stated, “The scale and speed of privatization can be judged from the fact that in the emerging markets revenue from privatization has grown dramatically over the past ten years”.  The following comparative table shows the sector wise revenue generated globally from privatization in emerging markets from 1990 to 1996.

 

  Global Privatization Revenues by Sector 1990-96

 

                                                            (US $ million)

 

Sectors

 

1990

 

1991

 

1992

 

1993

 

1994

 

1995

 

1996

 

Total

 

1.    Infrastructures

 

9704

 

6863

 

9715

 

5360

 

9399

 

9240

 

15,201

 

65,481

2.    Industry

1402

 

5558

 

7188

 

7491

 

6091

 

5787

 

3546

 

37,063

3.    Agriculture and Mining

1367

 

3608

 

3394

 

6215

 

4068

 

4336

 

2787

 

25,776

4.    Monetary services

47

 

7793

 

5263

 

3411

 

1065

 

1993

 

2671

 

22,182

five.    Other services

138

 

420

 

621

 

1184

 

1088

 

606

 

1108

 

5165

 

Total

 

12,658

 

24,242

 

26,181

 

23,661

 

21,712

 

21,901

 

25,313

 

155,667

 

Source: P.G. Babu and Nibedita Das, 1999b, ‘ Privatization and Auctions’, In India Development Report 1999-2000, Edited by Kirit S. Parikh, New Delhi, Oxford University Press, pp.268.

 

 

 

From the above comparative table, it proves that in the year 1996, the privatization generated 25, 313 million dollars as revenue from a variety of sectors as compare to the year 1990 that was only 12,658 million dollars. It is evident that privatization laid a strong foundation in the development of the various sectors.

 

 

 

Strengths over Privatization:

 

The powerful implementation of Privatization policy gives numerous strengths over the various sectors are:

 

Promotes Competition advantage.

 

Enhance regular in top quality of work life.

 

Creates and adopt innovative services.

 

Lessen delay in time for service.

 

Encourages adoption of new technologies.

 

Optimum utilization of function force.

 

Increase customer service.

 

Offers greater employment opportunities.

 

 

 

Weaknesses over Privatization:

 

On other side, there are a number of weaknesses of the privatization policy over the different sectors are:

 

Loose of government control over the authority of the sector.

 

No Guarantee for Cost stability.

 

Impact of Privatization on Banking Sector:

 

Banking service became lifeblood of the country and a component of every single human life for financial transaction and maintains their account safely. In earlier days, the governance of banking sectors is in the hands of private operators. In the course of the period of Indira Gandhi government, all the banks are been nationalized and under the control of Indian government for the benefit to Indian societies. But even the nationalization fails to prove the success in the method of adopting technology and the changing company and societies needs as these are result in outcome of the low speed of transaction procedure and also unable to retain the existing customers. Right now, the public as properly as private sector has been discovered owing, managing and controlling the banking services. It is correct to mention that privatization policy made a way to expand scope of banking services in virtually all the countries with new application of technologies, such as ATM banking, E-banking, Credit and Debit card system, individual banking, etc. which enable to perform banking services at any location and as to the convenient for the society. It also gives greater scope of banking sectors in producing more employment opportunities and created as challenges to the public sector banks.  On the other side, the privatization leads the banks unable to offer their efficient service at reasonable price and retain loyalty of the society. For example Some Private banks had raised minimum quantity for opening account from the public, following privatized the banking services by the government and charges for service also too high as compare to public banking sectors. It also failed behaving in such a way to recover the loans from their consumers

  Impact of Privatization on Telecommunication sector:

Telecommunication sector is one of the most essential service sectors in making the network of numerous countries in the world. In our Indian context, the government had privatized the telecommunication service to the private operators before some years due to the advent of global advanced technology. Indian private operators such as, Tata, Reliance, Airtel, Satyam, Aircel, Hutch were stepped successfully in the marketplace and offering telecommunication services successfully to the enterprise and society. At the identical time there is no cost stability for offering telecom services by the private telecom operators. And some of the private operators also failed to retain their existing customer via inefficient in response to the technical issues of customer.  For example, it is failed to concentrate on entire coverage as effectively provided by the BSNL, government-undertaking operator.

 

 

 

Impact of Privatization on Tourism sector:

 

Tourism service provides an instrumental way of generating revenue to the government in each and every country. The tourism sector helps in way to share the culture, heritage, religion, enriching the knowledge about the standard values of the country, generation of foreign exchange, and so on. As the result of privatization policy in tourism sectors, several allied sectors had been developed such as, transportation, hotel, availability of travel agents, tourist guides and so on, that outcomes in creating far more employment opportunities to the surrounding people and develop their regular of living. But right now, till the tourism sectors will need more improvement its services and produce far more awareness with new ideas and operations in order to attract and satisfy the society. This can be performed only by the way of privatization. In our Indian context, tourism sectors are in vital condition because the amalgamating components lack world class excellence and the policy makers appears least interested in producing them competitive. S.M.Jha (2003) says, “Indian tourism contributes only .40 percent as compare to world class potential”. So, only by privatizing which helps Indian tourism to bring higher contribution as compare to world-class excellence.

 

 

 

Impact of Privatization on Transportation sector:

 

At present moment, transportation service is the backbone of the country, which assists to interconnect its various parts. In several, European and American countries, privatization gives substantial and tremendous development in the field of transportation sectors. In our Indian context, the Tamilnadu government had planned to privatize some of the transportation routes in chennai and other districts were the government does not get sufficient revenue, and Government of India decided to handle the maintenance and customer oriented procedure to the private operators. The principal aim of privatizing the transportation sectors is to supply sufficient facilities, minimize delay in time, maintain and provide smooth service to the society. But till the railway service stood successfully over the privatization and it is amazing that, the railways sector overcame from the loss to profit zone with the new revolutionary tips of Mr. Laloo Prasad Yadav, Minister of Railways department.

 

 

 

Result:

 

The result of the study reveals that the advent of privatization policy in service sectors such as banking, telecommunication, tourism and transportation had tremendous modifications, merits and drawbacks. This study also elucidated that the privatization created a greatest impact in the service sectors with the hands of contemporary technology and improves the service in efficient and exceptional one according to the adjustments in needs of the society.

 

 

 

Conclusion:

 

In concluding that the author highlighted his views about the impact and adjustments of privatization in various service sectors. The consequences of privatization in the a variety of service sectors discussed above, which leads to greatest change and develop the lifestyle of the society by means of fulfilling their needs. Hence, this study also serves as guidelines to other researchers who wish conduct further function in this area and also offers effective data to everybody.     

 

 

 

Reference:

Babu P.G. and Nibedita Das, 1999a, ‘ Privatization and Auctions’, In India Development Report 1999 2000, Edited by Kirit S. Parikh, New Delhi, Oxford University Press, pp.268. Babu P.G. and Nibedita Das, 1999b, ‘ Privatization and Auctions’, In India Development Report 1999-2000, Edited by Kirit S. Parikh, New Delhi, Oxford University Press, pp.268. Brian Atwood, 1995, “Privatization, Democratization Linked in Development Process”, In Liberalization &amp Globalization of Indian Economy, Edited by K.R.Gupta, New Delhi, Atlantic Publisher &amp Distributor, p.131. Jha. S.M., 2003, Services Marketing and advertising, Sixth edition, Mumbai, Himalaya Publishing Home, p.31. Kay. J.A and D.J. Thompson, 1986, “Privatization: A Policy in search of a Rationale”, Economic Journal, Vol.96, p.381.

 

 

Oxford University Press