[Answered] Do you think, the government’s disinvestment policy has achieved its intended objectives? Give justifications for your arguments.

Introduction: Contextual introduction.
Body: Explain some achievements of the Disinvestment policy.  Also write some challenges.
Conclusion: Write a way forward.

Disinvestment is when the government sells its assets or a subsidiary, such as a Central or State public sector enterprise. Department of Investment and Public Asset Management (DIPAM) acts as the nodal agency for disinvestment. The main objectives of disinvestment in India are to reduce the fiscal burden and improve the efficiency of the enterprise, increase revenue sources, bring in private players, promote competition, and develop a strong capital market.

Achievements of the Disinvestment policy:

  • According to the Department of Investment and Public Asset Management (DIPAM), between 2004-05 to 2013-14, disinvestment raised Rs. 1.07 lakh crore, on an average yearly collection of Rs. 10,700 crores.
  • However, from 2014-15 to 2017-18, the collection went up to Rs. 2.12 lakh crore, i.e., a yearly collection of Rs. 53,000 crores.
  • The government exceeded the target of Rs. 1 lakh crore in 2017-18 and Rs. 80,000 crores in 2018-19.
  • The success of BHARAT-22 Exchange Traded Funds (ETF)took government closer to the disinvestment target.


  • Centre has not met the disinvestment target for 2022-23 so far. The government’s disinvestment receipts stood at ₹31,106.64 crores as against the budget estimate of ₹65,000 crores.
  • The strategic sale of Central Electronics was also shelved due to lapses in the bidding process.
  • Strategic sales stalled over FY21 and FY22 when India saw three waves of the pandemic, largely because potential investors were unable to physically inspect the assets, conduct due diligence and submit bids.
  • Disinvestment has also faced opposition from employeesfearful of job losses.
  • Several state governments have opposed privatizationas well.

A third-party valuation of every PSU’s assets and a minimum number of bidders should be necessary pre-conditions before going ahead with each sale. The government should look into strengthening the regulatory framework that ensures efficient market conditions.

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