Political and Economic Systems

Privatization is an international policy. Privatization can be defined as a process of transferring of ownership or management of an enterprise from public sector to private sector. It helps to increase the size and dynamism of private sector. It also helps to reduce administrative burdens on the public sector.

An essential pre-requisite for a successful privatization is liberalization. Liberalization refers to end of license, quota and many more restrictions and controls which were put on industries before 1991. Liberalization is of utmost importance in order to give greater role to private sector of the economy.

The relaxation of government restrictions in areas of social of economic policy is known as liberalization. It refers to the process of eliminating unnecessary conntrols and restrictions on the smooth functioning of business enterprise.

The government controls economic activities under centrally planned economies A centrally planned economy, also known as a command economy, is an economic system in which a central authority, such as a government, makes economic decisions regarding the manufacturing and the distribution of products. Centrally planned economies are different from market economies in which such decisions are traditionally made by businesses and consumers.

Communism is an economic and political system where the state owns and controls all means of production and industry. This is in contrast to capitalism, where private ownership is the norm.

Socialism is an economic system where the government or the public owns and regulates some key industries and production to ensure equitable distribution of wealth, while still allowing for some private property.

Capitalism is an economic system characterized by private ownership of the means of production and the operation of markets with minimal government intervention. This is often referred to as a laissez-faire approach.

Communism called for the violent overthrow of those in power and did not protect private property.

Socialism calls for public ownership rather than private control of property and natural resources. According to the socialist view, individuals do not live or work in isolation but live in cooperation with one another. Further, everything that people produce is a social product, and everyone who contributes to the production of a
good has a right to share it. Therefore, society, as a whole, should own or control property for the benefit of all its members.

 Socialism means collective  ownership of the means of production. It stands for a democratically controlled economy and abolition of private ownership of land and industry. It was against the exploitation of man by man and fought for equal rights of all.

Liberalisation refers to the removal of government controls, such as licenses and quotas, to allow the market to function more freely. Privatisation involves transferring ownership, while globalisation involves integrating with the world economy.

The term Liberalisation means movement towards a free market system. It is also known as the withdrawal of regulation and restrictions of private sectors. Private sectors are encouraged to enter into core industries that are reserved for the public sector. It is one of the notable aspects of the economic reforms 1991 of India.

Public sector refers to all the companies, bank, commerce and trade which has 51% or more of government shares as it equity. Therefore, it refers to the government ownership on commerce and trade.

The central problems of the economy is solved by a centrally based planning authority that resolves all the centrally based problems related to production of goods and services in the economy which includes the problem of 'What to produce? Consumer goods or capital goods?' which is decided by allocating resources for the production keeping in mind the needs of the people i.e. consumer goods and to satisfy their wants.