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Q. Privatization of Air India: Minimum Government and Maximum Governance require institutional changes. Elaborate
Jul 04, 2017 Related to : GS Paper-3

Ans :

Introduction-

It is rightly said that to bring in Minimum Government and Maximum Governance it is required that there is deeper institutional change. With the era of Liberalization, Privatization and Globalization it is required that government act as a facilitator and not as a provider. This can be brought in by following institutional changes:

Institutional Changes:

  • Shifting from government control to private control: This will increase efficiency of the system and will provide better services to the customers. Dis-investment is a way forward to make PSUs profitable.
  • Reduction in red tapism: Increasing amount of bureaucratic control hampers the growth rate of the country.
  • Transparency: There is a requirement of bring in transparency in the system with greater amount of social audit so that Good Governance can be realized in true sense.
  • Involving other stakeholders: It is required that government brings more stakeholders like NGOs, private companies to implement welfare schemes in a better way. This will bring in more accountability in the system.

Conclusion-

It makes no sense for a government to run commercial operations in areas such as aviation, where private companies do a satisfactory job. One, the government faces conflicts of interests when it makes policy, appoints the regulator and also has a commercial stake. In such a scenario, consumer welfare is inevitably given short shrift. Two, it is a poor choice in terms of resource allocation. To illustrate, India’s rural healthcare facilities are abysmal and the market will not plug the gap. It is in an area such as this that government should allocate its resources as there is no viable alternative.


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