‘States welcome private investors but push back on PSU privatization’

Syllabus: GS- III

Subject: Economy

Topic: Industry and Industrial policies

Issue: Disinvestment

  • Disinvestment refers to the government’s policy of selling its assets in public sector enterprises, either partially or fully.
  • Strategic disinvestment is the specific type of disinvestment where a majority stake (50% or more) in a company is sold.
  • This leads to transfer of control and management to the buyer.

Government’s policy:

  • In India, the Department of Investment and Public Asset Management (DIPAM) under the Finance Ministry is concerned with disinvestments.
  • Policy of Govt. of India:
    • In strategic sectors (Atomic Energy, Space PSUs) – “bare minimum presence” of the government.
    • In non-strategic sectors – complete exit of govt. share.
  • Disinvestment targets
Financial year and target set (in  lakh crore) Target Achieved
2020-21 : 2.10 Only 16% of the target.
2021-22 : 1.75 Only 8% of the target
2022-23 : 0.65 48% of the target
2023-24 : 0.51(lowest target set in 7 years)
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