Question

Write 3 observations highlighting the need and significance of disinvestment.

Answer 1

Explanation:

As it allows an entity to reduce its debt, disinvestment can pave the way for the long-term growth and development of a country. Moreover, it enables the open market to have a larger share of PSU ownership, thereby facilitating the development of a stronger capital market.

In simple words, the main objectives of disinvestment in India can be summed up as follows:

Improving public finances

Lowering Government’s fiscal burden

Allowing higher private ownerships

Promoting and maintaining competition in the market

Funding programmes for growth and development

Depoliticising non-essential activities

Read more on Groww: https://groww.in/blog/disinvestment-in-india-objectives-and-importance/