Disinvestment

Why it matters

• It serves as a mechanism to reduce the fiscal burden on the exchequer by offloading loss-making or non-strategic public sector units.
• It promotes market discipline and operational efficiency in public enterprises through private sector participation and improved corporate governance.
• It is utilized as a tool for non-tax revenue generation to fund social sector schemes and infrastructure development projects.
• It facilitates the transfer of ownership and management control to the private sector, often termed as strategic disinvestment.

How it is asked

Candidates should focus on the distinction between minority stake sale and strategic disinvestment, the role of the Department of Investment and Public Asset Management, and the impact of disinvestment on fiscal deficit management and public sector reform.