The process of selling off part of equity of PSE is called :
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Disinvestment
Selling off a part of the equity (ownership shares) of public sector enterprises (PSEs) to the public is called disinvestment. It is a form of privatisation. The government said its main purpose was to improve financial discipline and help modernisation.
Note: A same/similar question was asked in CUET (UG) in the papers below.
| 2026 | 2025 | 2024 | 2023 | 2022 |
| 13-05 S1* 21-05 S1* 31-05 S1* | – | – | 10-06 S3* 21-06 S2* 23-06 S3 | – |
* A similar question.
NCERT (2026-27): “3.4 Privatisation It implies shedding of the ownership or management of a government owned enterprise. Government companies are converted into private companies in two ways (i) by withdrawal of the government from ownership and management of public sector companies and or (ii) by outright sale of public sector companies. 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.” |