Does the word privations has something to do with the government?

You're probably thinking of privatization, which involves transfer of public services to private businesses. Privation refers to the hardships of not having the basic necessities of life, or being deprived of comforts.

From Theodore Dreiser's Sister Carrie:

He was a mere boy in years—twenty-one about—but with a body lank and long, because of privation. A little good living would have made this youth plump and swaggering.

And in Last of the Mohicans, by James Fenimore Cooper:

A few succeeding days were passed amid the privations, the uproar, and the dangers of the siege, which was vigorously pressed by a power, against whose approaches Munro possessed no competent means of resistance.