Question

Privatization is a way to a. shrink the federal budget by selling government services or property in the private sector. b. increase the government’s role by purchasing private companies. c. reduce government costs by relocating government programs to private groups or corporations. d. reduce big government by doing without some of the programs it once provided.

Answer 1

Answer:

c. reduce government costs by relocating government programs to private groups or corporations.

Explanation:

Privatisation is reducing the share of government ownership & increasing the share of private ownership.

It can be done in two ways : Disinvestment of Public Sector Units (PSUs)  Equity , Transfer of PSU (s) ownership & management to private sector.

Privatisation by either of the two ways reduces the financial burden on government, by liberating them from management of public sector or state owned enterprises. This public private reallocation, hence reduces government costs or expenditure -  by assigning programs unnecessary to be done by public sector - to private groups or corporations.

Eg : When Indian Economy underwent New Economic Policy [Liberalisation, Privatisation, Globalisation] in 1991, it reduced government reserved sectors from 18 to only crucial 3 - Railways, Defence etc.