Question

explain the challenges of disinvestment programme

Answer 1

Hi, please consider the answer given below;

You need to note that there were many challenges in disinvestment program and they include the following;

1. Private companies were no ready to takeover shares.

2. The interest of many private companies were that they were just looking for the profit and thus the disinvestment program was a barrier to this.

Answer 2

Disinvestment  is a process  through which  the  Government’s share in the Public Sector Undertakings is hived off. In disinvestment, the Government sells only a part of the equity which is essentially less than 51% so that ownership and management rights can be hold by the Government itself.

The process of disinvestment is not accepted widely  as it is considered against the interest of socially disadvantageous people.

Political pressure from  opposition often leads to stalling of this process.

Loss making industry don’t attract investment from private parties.

Lack of transparency in the investment policy  followed by the Goverment also act as a hinderance in this process.

The Government should try to come out with a time bound programme to make it more effective .