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Advantages of disinvestment to government & people
Arjama Mukherjee[DM14D08]
Outline• What is disinvestment ?• How government disinvest ?• Why government disinvest ?
Redefining disinvestment• Conversion of securities into
cash• Selling or Liquidating an
Asset or Subsidiary. • Divestment or Divestiture• Strategic move for raising
resources to meet general or specific needs.
Source: investopedia.com
Methods of disinvestment• Strategic sale – U.S. government giving
up control of the Internet to ICANN• Capital market – SAIL offering 5% of its
stake at @Rs83 per share• Auction – Government selling 2G
spectrum via auction• Sales to employee – SAIL selling some of
its share to its employee
Source: tradingeconomics.com
Disinvestment helping government• It will generate money to reduce fiscal deficit• Government utilizes these funds for welfare of public• It will improve efficiency and abilities of organization• Loss 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
Source: economictimes.com
Disinvestment helping people• Relief from tax burden• 75% of revenue generated are utilized
in promoting health and education• Better service experience• Freedom from bureaucracy and red
tapes• Modernizations through technology• Encouraging entrepreneurs
Conclusion• Disinvestment helps government to tackle fiscal deficit• Eases the burden of tax• “It’s not government business to do business”
- PM Narendra Modi• Government during crisis can either go for disinvestment
or adopt Gujarat model.
Any Questions
Thank You
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