Centre bets big on disinvestment as a growth tactic

Disinvestment is a strategy through which the government gives up either a part of or full equity holding of PSUs. Privatization opens up business opportunities to the private sector, while disinvestment aims to strengthen the management by adding private talent. Mint decodes

What is the agenda behind disinvestment?

Disinvestment helps to reduce the fiscal burden on the exchequer for financing PSUs. It improves access to public finances by expanding share ownership base, funds development programmes and growth prospects of the country and depoliticizes non-essential services. PSUs that were meant to be pillars of economic growth have ended up being more of a strain on government resources because of their inefficiency and low returns. The strategic sale of ownership in PSUs will help to spur competition and bring about market discipline. It will induce optimization of government resources to deliver maximum returns for the country.