Public vs. On the other hand, public sector employees are government employees and their jobs are secure. The merits are that the private organisation is independent of the state and therefore a net contributor to state income and employment. Image source: freedomhealthinsurance.co.uk When seeking medical assistance, you should look for the best health care hospital. For the purpose of cost reduction and profit maximization. Inefficient public sector. It also means we lose out on future dividends from the profits of public companies. Demerits. All of privatization's advantages and disadvantages are, directly or indirectly, the result of this drive for profit. Disparity in public and private schools : Private sector has raised the bars of their school standards too high that government schools are unable to match up to their benchmarks. The salary factor. Private hospitals offer numerous benefits including the ability to choose your doctor or surgeon. The private sector is always busy with innovating new techniques, new production methods, etc. As you can see, many privatization pros and cons are effects of the same cause. Salaries paid to employees in the private sector are one of the major attractants for job seekers. Private: Advantages, Disadvantages and Trends in Raising Capital. Privatization is driven by private entities' need for profits and governments' need to operate efficiently. 1. Disadvantages of private placement One major disadvantage of private placement is that bond issuers will frequently have to pay higher interest rates to entice investors. 10/19/2017. They may suffer heavy losses. Disadvantages of Privatisation of Education. This is because Government regulates private industries through its various regulations and licensing. No freedom to pvt sector. The universal healthcare plan provided to citizens […] Disadvantages of privatisation. The Washington Post presents statistics from the National Treasury Employees Union according to which, in some cases, employees working in the federal sector receive remuneration up to 26 per cent lower than what they could receive in the private sector for a similar role. However, this is a one-off benefit. A corporation must be relatively certain there is a public thirst for its shares before “going public.” If there isn’t, a public offering is a very expensive waste of time and effort. Increased cost: Cost of production increases for the government as private sector also demands its profit share for the money it invests. 2. Private healthcare facilities give you the peace of mind that you will receive the best advanced medical treatment. They do not bother about the cost and profit of public enterprises. Control gets divided: Control gets divided between private and public sector. Natural monopoly There is no freedom to private sector in mixed economy. 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