Disinvestments

Why is it in the news ?
  • According to an official statement, the government expects to meet its disinvestment target of ₹80,000 crore.
  • Government has so far achieved only ₹56,473.42 crore, with only 15 days left for the end of the financial year,
More in the news
    • In 2017-18, the government earned ₹1,00,056.91 crore from disinvestment against a target of ₹72,500 crore.
    • The government is expecting the Power Finance Corporation’s (PFC) acquisition of the Rural Electrification Corporation (REC), to be completed soon.
    • In addition, the ongoing Initial Public Offering (IPO) of Mini Ratna company MSTC is also expected to earn more than ₹1,000 crore.
    • This will push disinvestment proceeds above the target.
    • Disinvestment:
      (1) Disinvestment means selling of assets.
      (2) Here, in the case of PUSs, disinvestment means Government selling/ diluting its stake (share) in Public Sector Undertakings in which it has a majority holding.
      (3) Disinvestment is carried out as a budgetary exercise, under which the government announces yearly targets for disinvestment for selected PSUs.
      • Why Disinvestment?
        (1) Disinvestment is aimed at reducing the financial burden on the government due to inefficient PSUs and to improve public finances.
        (2) It introduces competition and market discipline and helps to depoliticise non-essential services.
      Source
      The Hindu, ET.




      Posted by Jawwad Kazi on 15th Mar 2019
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