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

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40 comments Page 2 of 4.

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.

Sagar Bodkhe said:   1 decade ago
Undoubtedly disinvestment is good for our economy. Will definitely reduce the fiscal deficit. Which is one of the major concern of finance ministry today. The disinvestment commission was established with sole purpose of tackling the fiscal deficit problem. In early 90's when PSU's were giving negative returns. This will improve public-private participation in the PSU's. But what I think is that disinvestment should be kept below 50% to check the monopoly of the private sector in the fields directly / indirectly related to common man.

Poonam said:   1 decade ago
Hi Friends, Now today's is the time of competition. Everyone is part of this competition. Private sectors are growing very fast to compete with them public sector are coming forward and result is public and private sector partnership is growing. Private sectors are making the stratgic plans and public sector are investing money in them for public growth. That is good but government should keep on eye the whole procee means private sector may not create monopoly for that process should be in favor of people not for big and rich people.

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.

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.

Angika said:   1 decade ago
No doubt disinvestment will bring good managers and help the company to improve the sale but the government should keep some points in mind.

No matter how much loss a company has beard, government should have some stakes so that they can figure out the positive changes. Next the private company should not indulge in monopoly. Government should share the insights of the deal to gain the confidence of the employees. We should keep in mind the consequences of what happened in BALCO.

Dipti said:   1 decade ago
Disinvestment of public sectors is good option only if it is running in loss. Disinvestment will help a psu in gaining the technological knowledge from the private sectors and learning their strategies in earning profits. Otherwise the percentage share of the government should always be more than 50% as it is the government which is inclined towards the betterment of the people, society and development of backward area and removes economic differences.

Poonam said:   1 decade ago
Hi Friends, According to me disinvestment is really necessary for India. India is a developing country so it needs resources for their developing from other countries. Disinvestment really help to reduce this. Government Use money which they will get from disinvestment for country growth. Poor people will get the advantage from this. But government try to not disinvestment in necessary resources like Oil, Sugar etc.

N k meena said:   1 decade ago
To move economy from state economy to partially capitalistic economy is the part economic reform. Disinvestment is tools to provide autonomy in the economy that these effectively compete with international market standard and government burdon reduce in such a level that govt utilised the fund to mitigate fiscal deficit and added additional fund to plant development and critical areas.

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