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Consider the following statements regarding disinvestment: 1
. In a minority disinvestment, the government hands over control to the acquiring entity but retains some stake in it.
2. The proceeds from disinvestment cannot be used to finance the fiscal deficit.
3. NITI Aayog is responsible for undertaking disinvestment-related procedures.
Which of the statements given above is/are correct?
  • a)
    1 only
  • b)
    2 and 3 only
  • c)
    1 and 3 only
  • d)
    None
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
Consider the following statements regarding disinvestment: 1. In a min...
  • In the Union Budget for 2023-24, the government has set a disinvestment target of ₹51,000 crore, down nearly 21% from the budget estimate for the current year and just ₹1,000 crore more than the revised estimate. It is also the lowest target in seven years.
  • Disinvestment or divestment, in this context, is when the government sells its assets or a subsidiary, such as a Central or State public sector enterprise.
  • Minority disinvestment, majority disinvestment, and complete privatization are the three main approaches to disinvestment.
    • On fruition of minority disinvestment, the government retains a majority in the company, typically greater than 51%, thus ensuring management control.
    • In the case of majority divestment, the government hands over control to the acquiring entity but retains some stake whereas in complete privatisation, 100% control of the company is passed on to the buyer. Hence statement 1 is not correct.
  • Disinvestment also encourages private ownership of assets and trading in the open market. If successful, it also means that the government does not have to fund the losses of a loss-making unit anymore.
  • The Union Finance Ministry has a separate department for undertaking disinvestment-related procedures called the Department of Investment and Public Asset Management (DIPAM). Hence statement 3 is not correct.
  • The government may disinvest in order to reduce the fiscal burden or bridge the revenue shortfall for that year. It also uses disinvestment proceeds to finance the fiscal deficit, to invest in the economy and development or social sector programmes, and to retire government debt. Hence statement 2 is not correct.
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Consider the following statements regarding disinvestment: 1. In a minority disinvestment, the government hands over control to the acquiring entity but retains some stake in it.2. The proceeds from disinvestment cannot be used to finance the fiscal deficit.3. NITI Aayog is responsible for undertaking disinvestment-related procedures.Which of the statements given above is/are correct?a)1 onlyb)2 and 3 onlyc)1 and 3 onlyd)NoneCorrect answer is option 'D'. Can you explain this answer?
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Consider the following statements regarding disinvestment: 1. In a minority disinvestment, the government hands over control to the acquiring entity but retains some stake in it.2. The proceeds from disinvestment cannot be used to finance the fiscal deficit.3. NITI Aayog is responsible for undertaking disinvestment-related procedures.Which of the statements given above is/are correct?a)1 onlyb)2 and 3 onlyc)1 and 3 onlyd)NoneCorrect answer is option 'D'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements regarding disinvestment: 1. In a minority disinvestment, the government hands over control to the acquiring entity but retains some stake in it.2. The proceeds from disinvestment cannot be used to finance the fiscal deficit.3. NITI Aayog is responsible for undertaking disinvestment-related procedures.Which of the statements given above is/are correct?a)1 onlyb)2 and 3 onlyc)1 and 3 onlyd)NoneCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding disinvestment: 1. In a minority disinvestment, the government hands over control to the acquiring entity but retains some stake in it.2. The proceeds from disinvestment cannot be used to finance the fiscal deficit.3. NITI Aayog is responsible for undertaking disinvestment-related procedures.Which of the statements given above is/are correct?a)1 onlyb)2 and 3 onlyc)1 and 3 onlyd)NoneCorrect answer is option 'D'. Can you explain this answer?.
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