Disinvestment
Mission and Values
The Public Sector Units (PSUs) are very important in the Indian economy. PSUs account for 22% of India’s GDP, 6 % of employment in the organized sector and 20 % of direct and indirect taxes. PSUs help in the critical functions of promoting the socio-economic objectives of the Government and letting the government have a say in the market trends, it helps the government in ensuring stability in prices of key products and commodities. The root cause for the present scenario where the PSUs are in losses and the government is incurring huge deficit lies in their ownership structure. The claim is that a private organisation owner treats the business as his own thus the private sector is efficient and performs well. Therefore, the answer to all the troubles of the public sector is privatisation.
Bureaucracy, risk aversion, administered pricing systems, ineffective governance structures, inability to hire the best talent because of poor compensation, political interference, absence of objectivity in appointments of managers and corruption are among the many reasons that cause PSUs to under-perform. Privatisation may well be a short cut to help the PSUs and protect them. But in the long run, the root causes that afflict the PSUs must be tackled head-on.
Evolution
Disinvestment
Investment refers to the conversion of money or cash into securities, debentures, bonds or any other claims on money. As follows, disinvestment involves the conversion of money claims or securities into money or cash.
Disinvestment can also be defined as the action of an organisation selling or liquidating an asset or subsidiary. It is also referred to as ‘divestment’ or ‘divestiture.’
Disinvestment refers to sale from the government, partly or fully, of a government-owned enterprise. A company or an organisation will disinvest an asset either as a tactical move for the company, or for raising resources to meet general or specific requirements.
Objectives of
The Public Sector Units (PSUs) are very important in the Indian economy. PSUs account for 22% of India’s GDP, 6 % of employment in the organized sector and 20 % of direct and indirect taxes. PSUs help in the critical functions of promoting the socio-economic objectives of the Government and letting the government have a say in the market trends, it helps the government in ensuring stability in prices of key products and commodities. The root cause for the present scenario where the PSUs are in losses and the government is incurring huge deficit lies in their ownership structure. The claim is that a private organisation owner treats the business as his own thus the private sector is efficient and performs well. Therefore, the answer to all the troubles of the public sector is privatisation.
Bureaucracy, risk aversion, administered pricing systems, ineffective governance structures, inability to hire the best talent because of poor compensation, political interference, absence of objectivity in appointments of managers and corruption are among the many reasons that cause PSUs to under-perform. Privatisation may well be a short cut to help the PSUs and protect them. But in the long run, the root causes that afflict the PSUs must be tackled head-on.
Evolution
Disinvestment
Investment refers to the conversion of money or cash into securities, debentures, bonds or any other claims on money. As follows, disinvestment involves the conversion of money claims or securities into money or cash.
Disinvestment can also be defined as the action of an organisation selling or liquidating an asset or subsidiary. It is also referred to as ‘divestment’ or ‘divestiture.’
Disinvestment refers to sale from the government, partly or fully, of a government-owned enterprise. A company or an organisation will disinvest an asset either as a tactical move for the company, or for raising resources to meet general or specific requirements.
Objectives of