- It means sale or liquidation of the public assets by the government. These are usually Central and state public sector enterprises, projects or other fixed assets.
- The government can sell its shares, where it is the majority shareholder (Owns more than 51% of shares). For example, Air India, Bharat Petroleum, Delhi Metro Rail Corporation, etc.
- The government can either reduce its share by selling a part of the company or can transfer its ownership to the highest bidder.
Main objectives of Disinvestment in India:
- Reducing the fiscal burden on the exchequer
- Improving public finances
- To improve the overall efficiency of PSUs
- Funding growth and development programmes
- Maintaining and promoting competition in the market
- Nodal Department: Department of Investment and Public Asset Management(DIPAM) under the Ministry of Finance, handles the disinvestment-related works for the government.
Are Disinvestments targets met by the government?
- Except in a few years, the government fails to reach the disinvestment target each year.
- In the current year of 2020-21, less than 3% of the targeted revenue is generated through disinvestment as of November 2020.
Source: Indian Express