The process of selling off part of equity of PSE is called :

Disinvestment

The correct answer is option (2) : Disinvestment

The term "disinvestment" is used to describe the process of selling off or divesting a part of the government's equity or ownership in a public sector enterprise (PSE). Governments may choose to undertake disinvestment for various reasons, including raising funds, improving the efficiency of the enterprise, encouraging private sector participation, or achieving other economic and strategic objectives.