According to the government, which of the following were expected benefits of privatisation?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → All of the above
The government gave several reasons for privatisation. It expected better performance of PSUs, more FDI and better financial discipline.
Option (1) Better performance of PSUs through private capital and managerial capabilities — Correct statement, but it is only one of the correct points, so on its own it is not the answer. Private capital and managerial capabilities could improve the performance of PSUs.
Option (2) A strong impetus to the inflow of FDI — Correct statement, but it is only one of the correct points, so on its own it is not the answer. Privatisation could give a strong impetus to the inflow of FDI.
Option (3) Improved financial discipline — Correct statement, but it is only one of the correct points, so on its own it is not the answer. The sale was mainly to improve financial discipline and help modernisation.
NCERT (2026-27): “3.4 Privatisation … Privatisation of the public sector enterprises by selling off part of the equity of PSEs to the public is known as disinvestment. The purpose of the sale, according to the government, was mainly to improve financial discipline and facilitate modernisation. It was also envisaged that private capital and managerial capabilities could be effectively utilised to improve the performance of the PSUs.” “3.4 Privatisation The government envisaged that privatisation could provide strong impetus to the inflow of FDI. …” |