Practicing Success

Target Exam

CUET

Subject

Business Studies

Chapter

Business Environment

Question:

What does the term "disinvestments" mean?

Options:

Increasing government ownership in public sector enterprises

Transferring ownership from the private sector to the public sector

Transferring public sector enterprises to the private sector

Maintaining government stake in public sector enterprises

Correct Answer:

Transferring public sector enterprises to the private sector

Explanation:

The term disinvestments means transfer in the public sector enterprises to the private sector. It results in dilution of stake of the Government in the public enterprise. If there is dilution of Government ownership beyond 51 percent, it would result in transfer of ownership and management of the enterprise to the private sector.