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The Public sector enterprises have played a vital role in the economic development of India. However, government of India vigorously pursues the policy of disinvestment of such units. What is the rationale of disinvestment at this time?
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The Public sector enterprises have played a vital role in the economic...
Government is applying the policy of disinvestment because public enterprises are going in loss. So government want to give chance to private sector so that situation can be improved. Recently government want to privatize railway and air India too. So there are chances of seeing the Private railway in India.
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The Public sector enterprises have played a vital role in the economic...
Disinvestment of Public Sector Enterprises in India
The public sector enterprises (PSEs) have been major contributors to India's economic growth and development. However, the government of India has been pursuing the policy of disinvestment of PSEs for some time now. The rationale behind this policy is as follows:
1. Fiscal Consolidation
- One of the primary reasons for disinvestment is to improve the fiscal health of the government.
- The government can raise funds by selling its stake in PSEs, which can be utilized for various developmental activities.
- This will also help in reducing the fiscal deficit, which is a major concern for the government.
2. Efficiency and Productivity
- Another reason for disinvestment is to improve the efficiency and productivity of PSEs.
- Private sector players are believed to be more efficient in managing businesses and are expected to bring in better operational and financial practices.
- This will help in reducing the burden on the government and also improve the overall performance of PSEs.
3. Strategic Reasons
- Disinvestment of PSEs can also be driven by strategic reasons.
- The government may sell its stake in PSEs to strategic investors who can bring in new technologies, expertise and resources.
- This can help in scaling up the operations of PSEs and making them more competitive in the global market.
4. Better Allocation of Resources
- Disinvestment can also help in better allocation of resources.
- The government can focus on its core functions such as infrastructure development, social welfare schemes, and defense.
- The private sector can take up the responsibility of managing commercial activities.
5. Unlocking Value
- Disinvestment can also help in unlocking the value of PSEs.
- The government can sell its stake in PSEs at a premium, which can help in realizing the true value of these enterprises.
- This can also help in attracting more investments in the sector and creating more job opportunities.
In conclusion, disinvestment of PSEs is a strategic move by the government to improve the fiscal health of the country, improve the efficiency and productivity of PSEs, and unlock their true value. While the policy has been criticized by some, it is believed to be a step in the right direction towards achieving sustainable economic growth and development in India.
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The Public sector enterprises have played a vital role in the economic development of India. However, government of India vigorously pursues the policy of disinvestment of such units. What is the rationale of disinvestment at this time?
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The Public sector enterprises have played a vital role in the economic development of India. However, government of India vigorously pursues the policy of disinvestment of such units. What is the rationale of disinvestment at this time? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about The Public sector enterprises have played a vital role in the economic development of India. However, government of India vigorously pursues the policy of disinvestment of such units. What is the rationale of disinvestment at this time? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The Public sector enterprises have played a vital role in the economic development of India. However, government of India vigorously pursues the policy of disinvestment of such units. What is the rationale of disinvestment at this time?.
The Public sector enterprises have played a vital role in the economic development of India. However, government of India vigorously pursues the policy of disinvestment of such units. What is the rationale of disinvestment at this time? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about The Public sector enterprises have played a vital role in the economic development of India. However, government of India vigorously pursues the policy of disinvestment of such units. What is the rationale of disinvestment at this time? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The Public sector enterprises have played a vital role in the economic development of India. However, government of India vigorously pursues the policy of disinvestment of such units. What is the rationale of disinvestment at this time?.
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