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Which of the following is the objective of 'disinvestment in the public sectorundertakings?
  • a)
    Improve corporate governance
  • b)
    Realize the productive potential of PSUs through improved efficiency and profitability
  • c)
    Reducing public debt
  • d)
    All of the above
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
Which of the following is the objective of disinvestment in the public...
Disinvestment is the action of an organization or government selling or liquidating an asset or subsidiary. The term' disinvestment' is used to indicate the process of privatization. The primary objectives of disinvestment are:
  • Releasing the large number of public resources locked up in non- strategic PSEs, for redeployment in areas that are much higher on the social priority, such as basic health, family welfare, primary education and social and economic infrastructure;
  • Stemming further outflow of these scarce public resources for sustaining the unviable non- strategic PSEs;
  • Reducing the public debt;., Transferring the commercial risk to the private sector wherever the private sector is willing and able to step in;
  • Releasing other tangible and intangible resources, such as large manpower currently locked up in managing PSEs, and their time and energy, for redeployment in high Priority social sectors that are short of such resources.
  • Improve corporate governance.
  • Realize the productive potential of CPSEs through improved efficiency and profitability.
  • CPSE's wealth should rest in the hands of the people.
  • Raise resources for the government.
Therefore the correct answer is (d).
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It is often forgotten that globalization, is not only about policies on international economic relationships and transactions, but has equally to do with domestic policies of a nation. Policy changes necessitated by meeting the internationally set conditions (by WTO etc.) of free trade and investment flows obviously affect domestic producers and investors. But the basic philosophy underlying globalization emphasizes absolute freedom to markets to determine prices and production and distribution patterns, and view government interventions as processes that create distortions and bring in inefficiency. Thus, public enterprises have to be privatized through disinvestments and sales; sectors and activities hitherto reserved for the public sector have to be opened to the private sector. This logic extends to the social services like education and health. Any restrictions on the adjustments in workforce by way of retrenchment of workers should also be removed and exit should be made easier by removing any restrictions on closures. Employment and wages should be governed by free play of market forces, as any measure to regulate them can discourage investment and also create inefficiency in production.Above all, in line with the overall philosophy of reduction in the role of the state, fiscal reforms should be undertaken to have generally low levels of taxation and government expenditure should be kept to the minimum to abide by the principle of fiscal prudence. All these are policy actions on the domestic front and are not directly related to the core items of the globalization agenda, namely free international flow of goods and finance.Q.According to the passage, the basic philosophy of globalization is to

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Which of the following is the objective of disinvestment in the public sectorundertakings?a)Improve corporate governanceb)Realize the productive potential of PSUs through improved efficiency and profitabilityc)Reducing public debtd)All of the aboveCorrect answer is option 'D'. Can you explain this answer?
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Which of the following is the objective of disinvestment in the public sectorundertakings?a)Improve corporate governanceb)Realize the productive potential of PSUs through improved efficiency and profitabilityc)Reducing public debtd)All of the aboveCorrect answer is option 'D'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Which of the following is the objective of disinvestment in the public sectorundertakings?a)Improve corporate governanceb)Realize the productive potential of PSUs through improved efficiency and profitabilityc)Reducing public debtd)All of the aboveCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following is the objective of disinvestment in the public sectorundertakings?a)Improve corporate governanceb)Realize the productive potential of PSUs through improved efficiency and profitabilityc)Reducing public debtd)All of the aboveCorrect answer is option 'D'. Can you explain this answer?.
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