Why is the Government of India disinvesting its equity in the CPSEs

Why is the Government of India disinvesting its equity in the Central Public Sector Enterprises (CPSEs)?

  • 1. The Government intends to use the revenue earned from the disinvestment mainly to pay back the external debt.
  • 2. The Government no longer intends to retain the management control of the CPSEs.

Which of the statements given above is/are correct?

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. Neither 1 nor 2

Answer

Disinvestment of a percentage of shares owned by the Government in public undertakings emerged as a policy option in the wake of economic liberalisation and structural reforms launched in 1991.

The correct option is D.