Essay On The Nationalization: Its Advantages and Disadvantages

Generally speaking nationalization means the control of industries by the state. When a Government takes under its control as owner any privately run business, then this act is known as the act of nationalization.

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The state becomes the owner of the nationalized concern. The State and the Government become responsible for the loss and the profit of the nationalized business. A few years ago, in our won country, life insurance business was nationalized. Then fourteen banks were nationalized. Bus services on different routes have also been nationalized. Many other industries and business concerns, including coal mines, have also been taken over by the Government.

Some people are against nationalization. They say that by nationalization, the Government takes away the right of the citizens to do any business which they think themselves to be capable of. This is against the spirit of democracy. But it is not so. Nationalization ad democracy can go hand-in-hand. They are not opposed to each other.


Nationalization has become the economic creed of modern times. Its advantages are many. First, private ownership of big industries and business concerns gives rise to two classes. On the one side, there re big capitalists who own, manage and control the firms and the mills. On the other, are the poor laborers. The capitalists become richer while the poor laborers grow poorer. Nationalization removes exploitation. It reduces inequalities. The distribution of wealth becomes uniform and just.

Secondly, under private ownership competition is very keen. Thus, big and powerful capitalists try to crush their small rivals. This is against national interest. Nationalization curbs unhealthy competition and checks corruption.

There are certain basic industries which must not be left in the hands of private persons. They must be run by the Government. Production of arms and ammunition, atomic energy, public utility services like railways, electricity, oil and natural gas, waterworks and aviation, etc., are some such industries. In such production works, the service of the public is the main motive and not the earning of profits. We are sorry to note that a number of public sector undertakings are not doing commendable work. There are to-day a number of autonomous corporations, and they have not succeeded in increasing production. They are incurring heavy losses. They must face stiff competition from private enterprises so that their efficiency may be increased. The spirit of competition is of great good to the nation.

All is not good with nationalization. If the state begins to nationalize different business concerns from time to time, it kills private enterprise. Private persons do not invest in new industries lest they be nationalized.


Further, with gradual nationalization, the state begins to acquire greater and greater control over the life of the people. In the long run this leads to complete centralization of economic power in the hands of the state. This means bringing in dictatorship form the back door.

It should also be kept in mind that many of the privately owned concerns have only worn out and outdated machinery. Hence to nationalize such industries is not profitable. So new industries should be established instead of taking over the old ones. The public sector should be enlarged and strengthened, but the private sector must also be encouraged and helped to tide over the crisis which it may be facing.

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