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

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40 comments Page 1 of 4.

Vijendra said:   1 decade ago
Disinvestment is good idea to generate funds for government :

It will generate money to reduce fiscal deficit.

Govt. Can utilizes these funds for welfare of public.

It will improve efficiency and abilities of organisation.

Lose making PSU's will make profit.

Private sector have huge money to invest so it will improve infrastructure, technical efficiency.

It will change the attitude of lazy employees and will improve their efficiency.


Disinvestment should be avoided in the sectors which directly connected to common people like oil, sugar etc.

There should not be monopoly of private players.

Uttara said:   6 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.

Soumya Gupta said:   5 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).


Chetan said:   1 decade ago
Disinvestment should not be done totally, government should enter in to public private partnership where strategic decision making should be left to private players and funding part should be left to government this will not create monopoly of the private players as government would be monitoring body to protect interest of the society and nation.

Samb29 said:   9 years ago
Disinvestment itself is not the pill to inefficiency in PSUs. Inefficiencies come from interference by govt authorities in operation abilities, lethargic workforce-- less incentive to work (undue influence, less employee care and favoritism in promotions) , improper skill development of employees, nonavailability of art of technology, and less freedom to work. For all this problems PSUs need to be given more autonomy (non interference) then, PSUs will become income generating assets of government for short term money requirement government is trying to this invest and this will not solve all the problems. There is no evidence that private organisations are resistant to collapse.

Neeraj bhatt said:   1 decade ago
Hello friends,

Disinvestment is good if we talk about India because of following reasons-.

1) Government will generate funds spontaneously if needed.

2) It will help poor in long run because government do disinvestment only in the hope of generating good returns which will be used for the improvement of the country in upcoming budgets.

3) As private owners will run the business it will be helpful for the infrastructure also as India's infrastructure is very much depends on private companies.

4) New technology will be used which will reduce the wastage of resources, presently which is not there in government comp.

Mona said:   9 years ago
Hello friends.

According to me disinvestment is good and crucial step of the government against inefficiency of PUSs.

We are investing in any sector or in any project with this expectation that we will get good and sound returns from there but when get negative response from there. We do not need to invest in such work.

Disinvestment is one of the good government's weapon which will provide the government that way which is necessary for our economy.

It reduces tension of huge investment in public sector.

With the help of this system government can better decision regarding social welfare of society because reduces government pressure at great extent.

With every decision has two side one is favourable and other one is unfavourable.

Disinvestment reduce the role of public sector and increases the role of private one by which economy of our nation moving towards inequality in society.

Deepak.v said:   1 decade ago
1st we need to understand are we talking about fully disinvestment or partially because opinions differ in both cases. Partial investment is good irrespective of profit making psu or not if govt needs money & can't find any other effective way to raise funds as in current situation to meet the fiscal deficit govt has made a target of raising funds of Rs 40, 000 crore by divesting its stake in bhel, ongc & other psus & all are making profits & it is partial disinvestment so govt won't loose cntrl & anytym they can buyback when they get surplus of funds. & fully divestment is good when it is not govt's cup of tea.

BANSAL KUMAR said:   7 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:   7 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.

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