Singapore's Temasek-like model, sometimes seen in news is related to(...
The Economic Survey 2019-20 backed the government's move to aggressively privatise central public sector enterprises (CPSEs) through divestment of government stake, which will have a multiplier effect on improving efficiency and profitability of the divested company while unlocking capital that can be used for building public infrastructure.
The Survey cited the case of Temasek Holdings Company in Singapore, a model that it said can be adopted to maximise government stake in CPSEs successfully.
In the model, the government can transfer its stake in the listed CPSEs to a separate corporate entity that would be managed by an independent board and would be mandated to divest the government stake in these CPSEs over time. "This will lend professionalism and autonomy to the disinvestment programme which, in turn, would improve the economic performance of the CPSEs," the Survey said.
Singapore's Temasek-like model, sometimes seen in news is related to(...
The correct answer is (b) Disinvestment programme.
The Temasek-like model, also known as the Temasek model, refers to a type of investment model that is often associated with Singapore's sovereign wealth fund, Temasek Holdings. This model involves a disinvestment program, which is the process of selling off or reducing government ownership in state-owned enterprises.
Here is an explanation of why the correct answer is (b) Disinvestment programme:
1. The Temasek-like model:
- The Temasek-like model refers to the investment strategy adopted by Temasek Holdings, which is a government-owned investment company in Singapore.
- This model focuses on active investment management and seeks to maximize long-term returns on investments.
2. Disinvestment programme:
- One of the key components of the Temasek-like model is the disinvestment programme.
- A disinvestment programme involves the sale or reduction of government ownership in state-owned enterprises.
- By reducing government ownership, the aim is to increase efficiency, promote competition, and attract private sector participation.
3. Rationale behind disinvestment:
- Disinvestment is often undertaken to reduce the government's financial burden and debt.
- It can also help to improve the overall performance and governance of state-owned enterprises.
- By reducing government control, disinvestment allows for greater market competition and efficiency.
4. Other options:
- (a) Restrictive lockdown measures: This option is incorrect as it is not directly related to the Temasek-like model.
- (c) Local Governance: This option is incorrect as the Temasek-like model is primarily focused on investment and disinvestment, not local governance.
- (d) Primary Health care: This option is incorrect as the Temasek-like model is not specifically related to primary healthcare.
In conclusion, the correct answer is (b) Disinvestment programme because the Temasek-like model is associated with an investment strategy that involves the sale or reduction of government ownership in state-owned enterprises.