Day 40 – Q 3. Why do private institutions deliver quicker and better than the government? Do a critical assessment.
3. Why do private institutions deliver quicker and better than the government? Do a critical assessment.
निजी संस्थान सरकार से जल्दी और बेहतर परिणाम क्यों देते हैं? समालोचनात्मक मूल्यांकन करें।
Private sector dynamism versus public sector inefficiency has been the dominant political narrative of the last few decades. The comparative efficiency of the two has also been an important part of the arguments over privatization and outsourcing
Reasons for efficient service delivery by private sector:
- Different motives- Private sector is profit oriented which can only be maximized with efficiency whereas government is more oriented towards welfare maximization.
- Competition- Presence of a healthy competition forces private institutions to stay efficient. Government on the other hand has monopoly.
- Demand-supply mismatch- Government delivers public goods where supply is always short of demand like health care, but private institutions deliver products as per the demands only.
- Bureaucracy- There are no bureaucratic hurdles present in functioning of private sector.
- Specialization- Private players usually deal with a narrow spectrum of activities, thus improving their expertise and hence efficiency in delivery.
- Customer oriented- Private institutions tend to retain customers by providing them with a good customer experience. This is not the case with government.
However, what government is able to deliver cannot be expected from the private players:
- Social welfare- Affordable healthcare and education, sanitation etc. cannot be provided with profit motives, so these require government to deliver.
- Other services- Defense, space research, and critical infrastructure can only be supplied by the government due to lack of monetary returns.
It is not that government cannot deliver efficiently, as can be seen in case of service by ISRO. There needs to be incorporated more professionalism and accountability for the public organizations to deliver at par with their private counterparts.
Best answer: Sreelakshmy Vijayan Uma (for first part only)