What is the disinvestment of Public Sector Enterprises?

The correct answer is option 1- Sale of equity shares to Private sector.

Disinvestment involves the sale of the equity shares to the private sector and the public. The objective of disinvestment was to raise resources and encourage wider participation of the general public and workers in the ownership of these enterprises. The government had taken a decision to withdraw from the industrial sector and reduce its equity in all undertakings. It was expected that this would lead to improving managerial performance and ensuring financial discipline. But there remains a lot to be done in this area.