Disadvantages of Privatization
1. Increase in Tax Evasion
Private sector generally tries to avoid payment of taxes. Thus privatization of enterprises will result in the decrease of tax income.
2. Concentration of Wealth
Privatization of large industrial units and services sector such as banks and insurance companies will increase concentration of wealth in private hands. It means only rich people will reap the fruits of industrialization and the society will be divided between “haves and have-nots”.
3. Exploitation by Private Sector
Privatization will result in exploitation by rich people. They may charge more prices for their goods and services. They may terminate workers to reduce cost of production. Thus different types of exploitation may be started and the concept of welfare state for Pakistan will be jeopardized.
4. National Security Endangered
Telecommunication, Civil Aviation (Airlines) and railways if privatized then it would be a security risk for the country.