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“If conservation of Natural resources goes wrong, nothing else will go right” - MS Swaminathan

Natural resources to a nation are exactly like oxygen to a human being. These are the substances that originate from the land of the country and aid in socio-economic development. Some of the examples include oil, coal, metals, natural gas, etc. Flora and Fauna, sunlight, wind, water are essentially a part of natural resources too. The planet is often referred to as “Mother Earth” because it nourishes human beings like a mother and helps in their sustenance. The stock of natural resources for a country indicates its economic development and is also the surety of the fact that there is much more to come and that economic enhancement will be easier to achieve than many other countries. The creation of capital in an economy is contingent on natural resources and thus are catalysts of growth and prosperity. The abundance of resources gives way to urbanization because investment increases in factories and industries and thus spurs infrastructural development. These resources are like raw materials which are processed through various sectors of the economy to reach a stage of optimum utility for human beings directly. Resources take years on years to replenish and thus need constant vigilance as to how they should be exploited wisely.

What is the Privatisation?

Privatization in common parlance is a concept of transfer of ownership of means of production or any specific resource from governmental control to private regulation. Richard C. Brooks has discussed five forms of Privatisation in his paper “Privatisation of Government Services: An Overview and Review of the Literature” which are:

  • Absolute/Complete Privatization – It refers to an outright transfer of the ownership to the private sector including the responsibilities linked with those assets. It has been seen mainly in the economies of Central and Eastern Europe. It is not much famous in the United State of America due to regulations by the federal government and also the market-driven economy.
  • Privatization of Operations – It refers to the transfer of managerial and operational responsibilities to the private sector enterprises. It is usually done for venues where sports and concerts take place usually. The profit is earned in form of a fee that is charged from the people who come to these venues.
  • Contracting Out – In this type of privatization, the production of certain specific services is contracted to the private firm under a contract. The payment is done directly by the government to private enterprises for their services. Security services, data processing services are part of this type of privatization.
  • Franchising – It is the transfer of ownership to the private firm within a specific geographical location by governmental unit. Cable Television comes under this kind. Gas, electricity and water services are all part of this privatization model.
  • Open Competition – It is the final category of privatization where many privately owned firms compete within the market arena as is a kind of lucid competition. This category encompasses Internet service providers, telephone services, etc. It leaves the choice to the public as to where to focus their eyes upon among all the options available at their disposal.

Why Privatisation is essential?

India is a land of resources and aesthetic beauty and conservation of the same is of prime consideration for everyone. Despite getting such valuable gifts from nature, some of the resources are not utilized properly on one hand, and on another, some are overutilized leading to their paucity. Thus, this ecological imbalance needs to be addressed. The pubic enterprise is under huge losses these days because of the emerging corruption, inefficient administration, etc. So, in absence of the privatization in the natural resources sector, the situation would, rather than ameliorating, deteriorate. This method will increase the status and the value of these resources among people and would also spur economic growth. The idea behind privatization is that people won’t ever exploit something which they own. “When was the last time you washed a rental bike before returning it?” asked a libertarian friend of mine. His point was that we take care of things we own, and we don’t take care of things we don’t own (because we aren’t aware of their value). According to many economists, there is a requirement of devising the best ways to regulate the market of commons (resources that are scarce). “The Tragedy of Commons” was an article which got published in 1968 and it suggested the Privatisation of resources as a way to conserve the commons. Under this, the rights on the environment are transferred with the aim of the enhancement of its value among the masses like selling right to pollute atmosphere through the use of carbon or right of taking the fishes from sea, etc. This scheme, although sounds very promising, has long-term ramifications on sustainable development.

Privatization –
A Threat to Resource Sustainability?

Besides its advantages, this idea of privatization of natural resources unfolds a plethora of shortcomings which mainly concern the threat of this move to the sustainability of the natural resources. One of the primary reasons for this is the fear of concentration of the rights of natural resources in a few privileged hands. The privatization would lead to a monopoly of the company in this sector and this would highly affect the pricing of those resources. This would lead to the disentitlement of people from the resources which nature has provided them. It is a well-known fact that the private sector vouches on the profitability of the business. One would always choose profit in present over preservation for future generations. These rights will become tradable and thus, natural resources will stand exhausted. In turn, exploitation will increase due to privatization owing to the profit-seeking nature of the corporations. Privatization also causes growth and development to dwindle by extracting maximum resources from a source and then abandoning it in a deprived condition. “The example is of Canada, where the BC government allows Nestle to withdraw fresh water for some dollars per million litres. Is it good to commodify water–the basic human, right? Should we be worried about the potential impact of large-scale water bottling in regards to future water scarcity and droughts? Companies like Nestle and other commodify human rights and have little to no resistance against them. If these aren’t stopped, they could cause social, economic and environmental problems not only for small towns and developing countries but also for the entire world.” The privatization starkly affects the intimate relationship between man and nature why destroying the great civilization and rural forest culture that prevailed back then. It is pertinent to note that such a model which is based on ownership by private companies is very difficult to reverse. Mahatma Gandhi once rightly said that real swarajya will come, not by the acquisition of power by few but by the ability to resist by many in a situation when power is abused. The unethical acts by private corporations are a reason for resources not being used judiciously. These are a reason for worrying about the impounding threat of commoditization of natural resources and their manipulation.


Sustainable development suggests that the growth is done in a manner that is least harmful to any species and that, while it meets the need of the present generation, it should not compromise with the requirements of progenies (future generations). Multiple organizations around the globe were linked to the execution of this principle but could not welcome a considerable effect. The United Nations Millennium Goals puts its attention on world scenarios significantly such as hunger, poverty, political imbalance, etc. There are innumerable impediments in the way of sustainable development including lack of socio-economic growth in nations which in turn causes financial laxity. While considering privatization as a beneficial way for preserving natural resources, the scholars gave belongingness as a reason. They were of the view that people won’t exploit what they own or belong to them. But when this view was shifted towards the negative aspects of this model, the intricacies of this setup started to become lucid. The issues include the angle of monopoly and concentration of these resources in few hands, hiked prices, unethical resource exploitation leading to its paucity for future generations. Resources provided by nature are for public welfare and there is a need of a morally and ecologically ethical means of balance between using and preserving the resources. This idea of privatization is hazardous for sustainable growth. For any person, the ultimate aim of every individual is to be delightful of what he/she has and even a higher GDP won’t assure a higher Gross Happiness Index. This elated feel can come through harmony with nature. Thus, privatization as a solution will shatter our hopes of having a promising future with the stock of resources at our disposal.

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  • Brooks, R.C. (2004), "Privatization of government services: an overview and review of the literature", Journal of Public Budgeting, Accounting & Financial Management, Vol. 16 No. 4, pp. 467-491.
  • Sugandha Nagaria, Privatization of Natural Resources: A Critical Threat to Sustainable Development,
  • ibid