Question

What losses and challenges in PSUs typically necessitate privatisation?

Options

• Unrealistic performance standards and market dominance

• Complete absence of government investment

• Losses, mismanagement, and under-utilised capacity

• Excessive profitability and over-capacity

Answer 1

Privatisation becomes necessary when PSUs suffer from losses due to inefficient operations, mismanagement of resources, and under-utilised production capacity. These problems often stem from bureaucratic inefficiency and political interference in decision-making.