Thursday, January 24, 2019

MBA GD Topic: Globalization Or Privatization – Which One Is Better


MBA GD Topic: Globalization Or 

Privatization – Which One Is Better


Group Discussion topics for MBA aspirants may be based on current market scenarios or may compel students to analyze various market situations.
Privatization refers to the transfer of government assets or function to private ownership. This can be done through franchising, leasing or giving contracts etc. , on the other hand, encourages a cross-border movement of goods, service, technology, and capital to draw countries out of their cocoons and make them a part of the world economy. It can be in the form of foreign direct investment (FDI) or the reduction of international trade barriers.
So, what do you think is better for India? Here are a few points for you:

MBA GD Topic
MBA GD Topic


Arguments in favor of Privatization


Revive sick units: helps the government to turn around the sick public units which have become a liability into profit-making enterprises.
Diversify business: Even profit-making Public Sector Units (PSUs) are known to modernize and diversify their businesses to become more efficient when they are privatized.
Mitigates political influence: Privatising government functions free their management from political pressures when it comes to making critical decisions.

Arguments against Privatization


Encourages monopoly: Privatisation vests the power in the hands of a few big business houses and income and wealth disparities increase.
Denies social justice: Limited resources and interests of private individuals may result in lop-sided development of industries at the cost of social justice and public welfare.

MBA GD Topic
MBA GD Topic


Arguments in favor of Globalisation


Improves efficiency of resources: helps in improving the efficiency of resources, reduce capital-output ratio, increases inflow of capital and labor productivity and updates technology.
Good for Indian economy: Globalisation can restructure the production and trade pattern in an economy with scarce capital and abundant labor.
Entry of foreign competition: Entry of foreign players force domestic industries and banking sector to be more competitive, efficient and quality-oriented.

Arguments against Globalization


Destroys local industries: Multinational companies and Chinese goods available at cheaper rates are destroying local industries. Supermarket and hypermarket chains would cause severe displacement of small shopkeepers and traders that are largely a part of the unorganized sector.
No manufacturing plants in India: MNCs that have set up manufacturing plants in India have not signed any technology transfer agreement with Indian companies.

Conclusion


Used wisely, both privatisation and globalisation can benefit India. India’s share in world export was 0.53% in 1991 but globalisation helped us to improve it to 1.6% in 2013. On the other hand, there are many shining examples of successful privatisations in India such as Lagan Jute machiner company limited whose gross turnover increased from Rs 6 million in April-June 2000 to Rs 24 million in July-September 2000 due to privatisation.


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