However, some economists point to the adverse effect of privatization.

They offer following arguments:

No Welfare State

The concept of welfare state may get defeated with the Privatization of economy. Private sector would not care about the society as its main objective is to earn profits.

Less Social Development

Government or Public sector companies also keep doing social work simultaneously. In case privatization happens, it will result in fewer funds for society because private companies have no obligation to do social work.

Unemployment

Privatization will also result in retrenchment of employees. In private sector enterprises there is emphasis on performance which indirectly results in work pressure and meeting deadlines or targets and individuals who have been doing work for years without much pressure find it difficult to adjust to new setting and many end up resigning from their service.

Long Term Risk

Risk of short-term gains is prominent in private companies. There are decisions to start ventures which result in short term benefits but may not be good for long term.