Day 12 – Q 3. Privatisation of PSU banks is a threat to employment. Do you agree? Critically comment. (15 Marks)

  • IASbaba
  • February 11, 2022
  • 0
GS 3, Indian Economy, TLP-UPSC Mains Answer Writing
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3. Privatisation of PSU banks is a threat to employment. Do you agree? Critically comment. (15 Marks)

पीएसयू बैंकों का निजीकरण रोजगार के लिए खतरा है। क्या आप सहमत हैं? समालोचनात्मक टिप्पणी करें।


Candidates need to critically comment about how privatisation of PSU banks is a threat to employment.


PSU stands for “Public Sector Undertaking”. In general, we can say that a PSU is an enterprise in which the majority of the stocks (more than 50%) are owned by the Central Government, State Government or Union Territory Government or more than one of them together. PSU or Public Sector Undertakings are also called Public Sector Enterprises. Currently India has about 300+ PSUs working under the control of the Government.

Privatisation of PSU banks is a threat to employment

Although privatization will bring many positive changes in the economy yes it has some dark side too. None of them can be ignored. Though we have prepared to move towards the privatization, it is very important for us to know its cons and should work in reducing their effects. Some of the disadvantages of privatization of PSUs are as follows:

  • Although the main goal of privatization is to increase the efficiency of the Enterprise yet the inefficiency at certain extent is found in private organisations too.
  • As the PSUs works with the motive to social welfare, the private enterprises will be mostly concerned on the profit of the enterprise.
  • The privatization of PSUs will reduce the opportunity of employment.
  • It is also seen and is obvious that the employees in private enterprises often become the victim of exploitation.
  • Also, an Industrial dispute is seen in private enterprises which will be obstacle in the smooth run of the enterprise.

Privatisation of PSU banks is not a threat to employment

The privatization of PSUs is the need of the time and is very necessary for the growth of the nation. The privatization has many strong favours and thus seems to be profitable for the country. Some of the Pros/advantages of privatization of PSUs are as follows:

  • The PSUs in India are suffering from the problem of inefficiency and privatization would be the best tool to remove this inability.
  • The privatization of PSUs will reduce the burden of the Government and will also help in generating financial resources.
  • The privatization will also help in improving the performances of the employees, making them accountable and increasing their efficiency.
  • The private sectors understand better the value of time and money and so make the optimum utilization of the resources available.
  • The privatization of PSUs will bring the competitiveness and thus increasing their productivity, it will bring them in the international markets.
  • The privatization of PSUs will free them from the Governmental and political interference.
  • Privatization will help in removing the bureaucracy from the Enterprise.


The Public Sector Undertakings (PSUs) are a major part of Indian economy. They have been running for a long time in India and are now being captured by some drawbacks. The Government of India has taken serious concerns on them and is planning to privatize the PSUs but before applying the rule of privatization, it must be though if these problems can be removed without privatizing them. 


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