An economist wants a loss-making government-owned company sold to a p…

An economist wants a loss-making government-owned company sold to a private firm. Which statements describe the view of advocates of marketisation?

(A) They believe such steps will promote economic growth and prosperity.
(B) They hold that private industry is more efficient than government-owned industry.
(C) They favour higher import duties so that Indian private firms grow faster.
(D) They prefer market-based processes over government regulations to solve economic problems.

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 2

The correct answer is Option (2) → A, B and D only

(A) They believe such steps will promote economic growth and prosperity. — Correct. Advocates of marketisation believe that steps like privatisation will promote economic growth and prosperity.

(B) They hold that private industry is more efficient than government-owned industry. — Correct. Their reason is that private industry is more efficient than government-owned industry.

(C) They favour higher import duties so that Indian private firms grow faster. — Incorrect. Marketisation favours a reduction in tariffs and import duties so that foreign goods come in more easily. Higher import duties would be government protection, the opposite of this view.

(D) They prefer market-based processes over government regulations to solve economic problems. — Correct. Marketisation means using markets or market-based processes, rather than government regulations or policies, to solve social, political or economic problems.

NCERT (2026-27): “Debate on Liberalisation – Market Versus State
The globalisation of the Indian economy has been due primarily to the policy of liberalisation that was started in the late 1980s. Liberalisation includes a range of policies such as the privatisation of public sector enterprises (selling government-owned companies to private companies); loosening of government regulations on capital, labour, and trade; a reduction in tariffs and import duties so that foreign goods can be imported more easily; and allowing easier access for foreign companies to set up industries in India. Another word for such changes is marketisation, or the use of markets or market-based processes (rather than government regulations or policies) to solve social, political, or economic problems. These include relaxation or removal of economic controls (deregulation), privatisation of industries, and removing government controls over wages and prices. Those who advocate marketisation believe that these steps will promote economic growth and prosperity because private industry is more efficient than government-owned industry.”