Which of the following statements about disinvestment are correct?
(A) It means selling off part of the equity of PSEs to the public.
(B) According to the government, its purpose was mainly to improve financial discipline.
(C) According to the government, it was meant to facilitate modernisation.
(D) The proceeds from it have been used mainly for building social infrastructure in the country.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → (A), (B) and (C) only
(A) It means selling off part of the equity of PSEs to the public. — Correct. Selling part of the equity of PSEs to the public is called disinvestment.
(B) According to the government, its purpose was mainly to improve financial discipline. — Correct. The government named financial discipline as a main purpose.
(C) According to the government, it was meant to facilitate modernisation. — Correct. It was also meant to facilitate modernisation.
(D) The proceeds from it have been used mainly for building social infrastructure in the country. — Incorrect. Critics point out that the proceeds are used to offset the shortage of government revenues.
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. …” “Disinvestment: … Moreover, the proceeds from disinvestment are used to offset the shortage of government revenues rather than using it for the development of PSEs and building social infrastructure in the country. …” |