Name the process by which the government may sell its shares in public sector companies.
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Disinvestment
Option (2) Privatization — Incorrect. Privatisation is the handing over of a company to private owners, as with Modern Foods, the first government company to be privatised. Selling shares may lead to it, but the process of the government selling its shares is called disinvestment.
Option (3) Outsourcing — Incorrect. Outsourcing is when a company gives its work to smaller companies or even to homes instead of doing it with its own permanent employees. It concerns how work is done, not the sale of government shares.
Option (4) Disinvestment — Correct. The government is trying to sell its share in several public sector companies, a process known as disinvestment. Many government workers fear that they will lose their jobs after disinvestment.
NCERT (2025-26): “Globalisation, Liberalisation and Changes in Indian Industry … The government is trying to sell its share in several public sector companies, a process which is known as disinvestment. Many government workers are scared that after disinvestment, they will lose their jobs. In ‘Modern Foods’, which was set up by the government to make healthy bread available at cheap prices, and which was the first company to be privatised, 60% of the workers were forced to retire in the first five years. More and more companies are reducing the number of permanent employees and outsourcing their work to smaller companies or even to homes. For multinational companies, this outsourcing…” |