Will privatisation leads to less corruption ?

Corruption has become a way of life and ordinary Indians like me have become accustomed to it. It is not that I like but there is no other alternative. Can you think of any other place where an ‘amount’ has to be paid for getting the monthly salary from the state treasury? Even people who retire have to pay for their pensions and other post retirement benefits. Worse, the kin of dead also have to pay to get their work done. Corruption has become institutionalized in our country. I believe there are two main reasons for this.

The first is simple, human greed. People in a position to exert influence use their position to make a quick buck. As some of you pointed out, this malady has struck politicians in particular because they are the ones in a significant position to make policy and expenditure decisions.

The second is economic. In a poor country such as ours salaries for most government employees is pathetically low. Therefore, they have no choice but to substitute their income with illegal means. Taking bribe is a second source of income for many.
Most of the people at lower levels are not receiving proper wages. In order to support their families and maintain a proper living standard, these employees are taking bribes.

 The cure for the first problem is simple. Create a strong regulatory body to oversee the actions of those in power and if they are corrupt, bring them to justice. That is what happens here in the US and most other countries.

However, you will never eliminate corruption completely until you bring about economic development. This particular solution is much more difficult. To raise the standard of living of the people of our country sufficiently to eliminate corruption altogether will take decades. But, as other countries have shown us, it can be done.

The answer lies in three key strategies; privatization, increasing autonomy for local government and transparency. I would like to put forward some of my ideas to this problem in this series.

First is the issue of privatization. The main source for corruption in government is red tape. If you privatize, then there is less scope for government involvement and therefore, less corruption. The government’s primary job should be regulatory, to ensure the rights of the customers and the best interests of the nation. The government should not be in the business of business. 

Most of what we hear about privatizing public services these days carries the same simple message — privatizing is good. More sophisticated stories explain that the reason privatizing is good is that only the private sector can deliver a quality product at the lowest possible price.  Market forces and competition ensure that the private sector delivers a higher quality service at a lower cost than the public sector. 

The first and fore most benefit would be release of government resource for redeployment towards infrastructure, technology, health care and education, where government   attention is required. Besides privatization has a key part to play in sustained poverty reduction. Firstly, privatization encourages economic growth which in turn creates increased avenues for employment, more income and improved quality of life. Privatization has an effect on overall standards of governance. It reduces the scope for misuse of public funds, corruption and patronage by removing politicians and bureaucrats from business. Privatization also improves operational efficiency of the enterprise by introducing competition as well as incentive to make good commercial decisions. Such competition and efficiencies, in turn would flow back to the consumers and the general public through improved quality of goods and service at reasonable prices.


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