Which of the following is true about " Disinvestment" ?

• selling off part of equity of PSEs to the private sector
• it improves financial discipline in the company
• facilitate modernization by encouraging private sector

1, 2 and 3

The correct answer is option 2:1, 2 and 3

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.

• Selling off part of equity of PSEs to the private sector. This statement is correct. Disinvestment involves selling a portion of the government’s stake in Public Sector Enterprises (PSEs) to private entities.

• It improves financial discipline in the company. This is also correct. By involving private sector stakeholders, disinvestment can lead to better financial discipline and management practices within the company.

• Facilitates modernization by encouraging private sector. This statement is true as well. Private sector involvement can bring in capital, technology, and expertise, which can help in modernizing the company.