Question

What are the main objectives of Disinvestment?

1. To reduce the fiscal deficit.
2. To introduce competition and market discipline
3. To improve public finances and overall economic efficiency.
4. To build competence and strengthen their R & D.

1. 1, 2 and 3
2. 2, 3 and 4
3. 1, 3 and 4
4. 1, 2, 3 and 4

Answer 1

Correct Answer - Option 4 : 1, 2, 3 and 4

The correct answer is 1, 2, 3 and 4.

• Disinvestment means the sale or liquidation of assets by the government, usually Central and state public sector enterprises, projects, or other fixed assets.
• Main objectives of Disinvestment:
  • To reduce the fiscal deficit. Hence, Statement 1 is correct.
  • To meet the budgetary needs.
  • To improve public finances and overall economic efficiency. Hence, Statement 3 is correct.
  • To diversify the ownership of PSU for enhancing the efficiency of individual enterprise.
  • To build competence and strengthen their R & D. Hence, Statement 4 is correct.
  • To raise funds for technological up-gradation, modernization, and expansion of PSUs.
  • To introduce, competition and market discipline. Hence, Statement 2 is correct.
  • To fund growth and development programs.
  • To encourage a wider share of ownership.
  • To depoliticize non-essential services.
  • Transfer of Commercial Risks.
  • To encourage a wider share of ownership.
  • To depoliticize essential services.
  • To help public enterprises upgrade their technology to become competitive.
  • To rationalize and retrain their workforce.