Is disinvestment really that good for India or is a rethink in order?

Group Discussion
Points to remember before you participate in this discussion:
  • Assume you are one of the members of a real group discussion.
  • Take the initiative to participate and contribute your thoughts.
  • Contribute your positive thoughts towards providing the solution.
  • Post your thoughts here.
40 comments Page 1 of 4.

Praful said:   2 years ago
Why it is going in loss. Is it not governments responsibility to improve as per market?

Disinvestment is the only option?

It will cause to increase the goods cost to necessarythings. Reducing government jobs. And giving more power to private firms to create worst employment policies.

Soumya Gupta said:   6 years ago
Yes, after initiating NEP policy in India has a good impact in our economy. The earlier producer oriented market was in operation but now the consumer-oriented market is in operation. Manufacturer starts hiring expert labour who has good command new machinery. Competition level also increases from national to international level (globalization).


Uttara said:   7 years ago
Disinvestment means diluting partial or full government ownership to the private sector. Thus in generates huge amount for govt to use the amount in productive purposes. It helps the loss making PSUs to get private improved technologies. When govt decides to disinvest in any sector it takes account of the pros and cons and all the existing possibilities and it is only done when govt's interest of public welfare is not in jeopardy. In that perspective, disinvestment is good for the nation. As it minimises govt corruption to some extent. Makes PSUs more competitive. But there is a risk to it also. Private players may fall in the face of diversities then govt needs to rethink about buybacks of the shares. It happened in Australia where public Airways could not run in the hands of private players and at the end govt of Australia again had to take charge of the airway. So there is always an option open of the govt to reinvest in future when there is enough resources at hand.

Sandeep said:   7 years ago
Yes, it is very useful to collect the money in this manner which will show impact on the welfare of the of people.

BANSAL KUMAR said:   8 years ago
Yes, It is really important for India.
Importance of disinvestment lies in utilisation of funds for-

1. Financing the increase fiscal deficit.
2. Financing the large-scale infrastructure development.
3. For investing in the economy to encourage spending.
4. For the social programs like health and education.

Disinvestment also assumes significance due to the prevalence of an increasingly competitive environment which makes it difficult for many PSUs to operate profitably this leads to a rapid erosion of the value of the public assets making it critical to disinvest early to realize a high value.

Namrata said:   8 years ago
Loss-making PSU disinvestment will be a good idea. But PSU which is making a profit are good for the society as they generate respectable salary jobs and also profits are government money which is used for the society. PSU are provided competition to private players and keep the cost of goods or services in control. PSU working is more transparent. Nowadays we can see many private players/industrialist are involved in corruption. So PSU is good for our country if they are making the profit.

Optimisteconomist said:   8 years ago
Divestment is really going to infuse funds in the government safe but it may at the same time have to let go the robust dividends it is receiving by the investments in the PSUs. Government divestment target for 2015-16 was (which is now reduced to Rs. 30k Cr) to collect Rs. 70,000 Cr.

But GOI fetched Rs. 36,000 Cr from dividends through PSU investments in 2014-15 and that too with such an inefficient PSUs. Therefore, policymakers should focus on improving the operational efficiency and not just on getting rid of those investments.

Theeconomywizard said:   8 years ago
Disinvestment may help infuse funds which can reduce CAD. But government gets robust funds from the investment in PSUs.

In 2015-16, it is expected that government is to receive Rs. 36000 cr from dividends. That amounts to the half of the annual disinvestment target for 2015-16. And that to with such an inefficient PSUs. Stake sale can definitely reduce this income.

So, focus should be on to improve the operational performance of PSUs n not on the stake sale. Government of India should treat them as growth engines.

Sherlock said:   8 years ago
Disinvestment is instrument which is used well will certainly be benevolent for the economy but on the other side too much divestment will cause unfavorable monopoly in the market.

David said:   8 years ago
Disinvestment is necessary to get rid of financial burdens of government in PSU's which are under-performers but it should not go to a level where everything is privatized because there are more poor people in India.

Post your thoughts here:

Your comments will be displayed after verification.