Presented By:-Presented By:-

Vrushali Kawale Vrushali Kawale 28 28Sushant Mhamunkar Sushant Mhamunkar 35 35Tanay Sambre Tanay Sambre 50 50Subin Sadasivan Subin Sadasivan 57 57

Disinvestment – An insightDisinvestment – An insight

Disinvestment is the process of selling Government equity in Disinvestment is the process of selling Government equity in public sector units (PSUs) to private parties.public sector units (PSUs) to private parties.

Disinvestments, also known as divestments, are processes Disinvestments, also known as divestments, are processes utilized by companies when there is a need or desire to initiate utilized by companies when there is a need or desire to initiate a reduction in a reduction in capital investment.capital investment.

In India, the process of disinvestment of PSU’s began since In India, the process of disinvestment of PSU’s began since 1991-92.1991-92.

Disinvestment is called as ‘Partial Privatization’Disinvestment is called as ‘Partial Privatization’

Approaches to disinvestmentsApproaches to disinvestments

There are two approaches to disinvestments viz –There are two approaches to disinvestments viz –

The government sells its equity holdings in PSU’s to public or The government sells its equity holdings in PSU’s to public or private parties or MFI’s or other Financial Institutions.private parties or MFI’s or other Financial Institutions.

when PSUs are generally when PSUs are generally directed by the governmentdirected by the government to to issue their equity share to public, private parties, financial issue their equity share to public, private parties, financial institution and mutual fund with a view to reduce its control.institution and mutual fund with a view to reduce its control.

Why Disinvestment?Why Disinvestment?

Disinvestments occur when;Disinvestments occur when; There is a decision to make changes in the regulation of an There is a decision to make changes in the regulation of an

industry.industry. For Example, For Example, Deregulation of the communications industry in Deregulation of the communications industry in

the United States during the 1980’s.the United States during the 1980’s.

To reduce deficitsTo reduce deficits..

For Example, For Example, In NTPC, the government stake is currently In NTPC, the government stake is currently 89.5 per cent, In PFC, it is 89.78 per cent, 86.36 per cent in 89.5 per cent, In PFC, it is 89.78 per cent, 86.36 per cent in Powergrid and 81.82 per cent in REC.  Reducing its stake to Powergrid and 81.82 per cent in REC.  Reducing its stake to 51 per cent in these companies could earn the government a 51 per cent in these companies could earn the government a

revenue of Rs 99,044 crore.revenue of Rs 99,044 crore.

To overcome the problem of political involvement in PSU’s.To overcome the problem of political involvement in PSU’s.

Contd…Contd…

To enable the government to concentrate on social To enable the government to concentrate on social development.development.

To provide better service to the customer.To provide better service to the customer.

To ensure proper planning & execution.To ensure proper planning & execution.

To overcome the problem of corruption & inefficiencies.To overcome the problem of corruption & inefficiencies.

To fix responsibility on management.To fix responsibility on management.

Pros of disinvestmentsPros of disinvestments Balancing fiscal deficit and focus on various development Balancing fiscal deficit and focus on various development

projects.projects.

Brings about greater efficiencies for the economy and markets Brings about greater efficiencies for the economy and markets as a whole.as a whole.

Pay hikes, greater opportunities and avenues for career growth Pay hikes, greater opportunities and avenues for career growth for employees.for employees.

Allows new firms to enter into the market and thus increases Allows new firms to enter into the market and thus increases competition.competition.

Brings the low productivity PSUs back on track.Brings the low productivity PSUs back on track.

Cons of disinvestmentsCons of disinvestments

Loss of public interests.Loss of public interests.

Fear of foreign control.Fear of foreign control.

Issues with workers.Issues with workers.

Less number of bidders.Less number of bidders.

Types of DisinvestmentsTypes of Disinvestments

Offer for sale to public at fixed price.Offer for sale to public at fixed price.

For example, For example, MFIL, BALCO, CMC, HTL, IBP, HZL, PPL,

and IPCL.

Strategic saleStrategic sale

For example, Offer of 1 million shares of VSNL, listing of ONGC IPO.

Contd…Contd…

International offering.International offering.

Ex:-GDR of VSNL,MTNL etc.

Asset sale & winding upAsset sale & winding up

Ex:-Auction of sick PSU’s.

PSU’s in IndiaPSU’s in India

The EvolutionThe Evolution

Prior to independence, there were few public sector enterprises Prior to independence, there were few public sector enterprises in India such as Railways, Post & Telegraphs etc.in India such as Railways, Post & Telegraphs etc.

Few enterprises like Government Salt Factories, Quinine Few enterprises like Government Salt Factories, Quinine Factories, etc which were departmentally managed.Factories, etc which were departmentally managed.

In view of this type of socio-economic set up, our visionary leaders drew up a roadmap for the development of Public Sector as an instrument for self-reliant economic growth.

Contd…Contd…

The new strategies for the public sector were later outlined in the policy statements in the years1973, 1977, 1980 and 1991.

The year 1991 can be termed as the watershed year, heralding liberalization of the Indian economy.

Since, 1991 the Indian economy is liberalised i.e. opened to private players.

PSU’s Before 1980PSU’s Before 1980

The origin of the financial crisis can be traced from the The origin of the financial crisis can be traced from the inefficient management of the Indian economy in the 1980s.inefficient management of the Indian economy in the 1980s.

The government generates funds from various sources such as The government generates funds from various sources such as taxation, running of public sector enterprises etc. taxation, running of public sector enterprises etc.

When expenditure is more than income, the government When expenditure is more than income, the government borrows to finance the deficit from banks and also from people borrows to finance the deficit from banks and also from people within the country and from international financial within the country and from international financial institutions.institutions.

The income from public sector undertakings was also not very The income from public sector undertakings was also not very high to meet the growing expenditure.high to meet the growing expenditure.

Industries reserved for PSU Industries reserved for PSU before 1991before 1991

1.1. Mining of iron ore, Mining of iron ore, manganese ore, chrome ore, manganese ore, chrome ore, gypsum, sulphur, gold and gypsum, sulphur, gold and diamond. diamond.

2.2. Mining and processing Mining and processing copper, lead, zinc, tin copper, lead, zinc, tin molybdenum and wolfram molybdenum and wolfram

3.3. Minerals specified in the Minerals specified in the Schedule to the Atomic Schedule to the Atomic Energy (Control of Energy (Control of Production and Use) Order Production and Use) Order 1953. 1953.

4.4. Aircraft Aircraft 5.5. Air transport Air transport 6.6. Rail transportRail transport

7.7. Ship building Ship building 8.8. Telephones and telephone Telephones and telephone

cables, telegraph and wireless cables, telegraph and wireless apparatus (excluding radio apparatus (excluding radio receiving sets) receiving sets)

9.9. Generation and distribution Generation and distribution of electricity of electricity

10.10. Arms and Ammunition and Arms and Ammunition and allied items of defence allied items of defence equipment equipment

11.11. Atomic energy Atomic energy 12.12. Iron and Steel Iron and Steel 13.13. Heavy casting and forging of Heavy casting and forging of

steel items steel items

Contd…Contd…

14.14. Heavy plant and machinery Heavy plant and machinery required for iron and steel required for iron and steel production, for mining for production, for mining for machine tool manufacture machine tool manufacture and such other industries as and such other industries as may be specified by the may be specified by the Central Government. Central Government.

15.15. Heavy electrical plant Heavy electrical plant including large hydraulic including large hydraulic and steam turbines and steam turbines

16.16. Coal and lignite Coal and lignite 17.17. Minerals oils Minerals oils

18.18. Industries reserved for Industries reserved for PSU''s post 2002 PSU''s post 2002

19.19. Atomic Energy Atomic Energy 20.20. Minerals specified in Minerals specified in

schedule to atomic Energy schedule to atomic Energy (Control of Production and (Control of Production and Use) Order, 1953 Use) Order, 1953

21.21. Railway Transport Railway Transport

Different Types of Public Sector

Enterprises

Central Public Sector

Enterprises[CPSE]

Public Sector Banks[PSB’s]

State-level Public

Enterprises[SLPE’s]

Disinvestment policies in India

Industrial Policies Highlights

1. Industrial Policy of 1948 PSU’s for economic

development of India.

2. Industrial Policy of 1956 1St category. 2nd category. 3rd category.

3. Industrial Policy Statement 1973

Investments from large

industrial houses & foreign

companies was to be

permitted.

4. Policy statement 1977 Divided PSU’s in 5 categories viz-

Manufacturing, service & trading, financial, promotional & welfare.

Rangarajan Committee Report, Rangarajan Committee Report, 19931993

The disinvestment of government equity in PSEs could be up The disinvestment of government equity in PSEs could be up to 49% for industries exclusively reserved for public sector to 49% for industries exclusively reserved for public sector

In exceptional cases, such as the enterprises which had a In exceptional cases, such as the enterprises which had a dominant market share or industries of strategic importance, dominant market share or industries of strategic importance, the disinvestment would be up to 74the disinvestment would be up to 74

In all other cases, the committee recommended 100% In all other cases, the committee recommended 100% disinvestment. disinvestment.

New privatization policy, 1998New privatization policy, 1998 Sell above 51% of equity in strategic units. The new cap was Sell above 51% of equity in strategic units. The new cap was

fixed at 74%. fixed at 74%.

Share price to be market driven not pre-determined.Share price to be market driven not pre-determined.

Structural mechanism to speed up disinvestment procedure Structural mechanism to speed up disinvestment procedure was to be put in place. Under this mechanism PSUs would be was to be put in place. Under this mechanism PSUs would be freed from administrative control of the parent ministry and freed from administrative control of the parent ministry and placed under a new body, to be created for monitoring the placed under a new body, to be created for monitoring the disinvestment process. disinvestment process.

Strategic & Non-strategic Strategic & Non-strategic Classification March 1999Classification March 1999

3 industries were strategic industries and rest all the industries 3 industries were strategic industries and rest all the industries were non strategic.were non strategic.

Strategic would include Strategic would include arms and ammunition, atomic arms and ammunition, atomic

energy and railways.energy and railways.

All other PSEs would be considered as non strategic units and All other PSEs would be considered as non strategic units and disinvestment of up to 74% would be taken up on a case to disinvestment of up to 74% would be taken up on a case to

case basis.case basis.   

Importance of PSU’sImportance of PSU’s

In India, public sector undertaking (PSU) is a term used for a In India, public sector undertaking (PSU) is a term used for a government-owned corporation (company in the public government-owned corporation (company in the public sector).sector).

The PSUs, both at the Central and state levels, play a The PSUs, both at the Central and state levels, play a prominent role in the industrializations and economic prominent role in the industrializations and economic development of India.development of India.

The macroeconomic objectives of Central PSUs have been The macroeconomic objectives of Central PSUs have been derived from the Industrial Policy Resolutions and the Five derived from the Industrial Policy Resolutions and the Five

Year Plans.Year Plans.

Contd…Contd…

The state level public sectors enterprises or state PSUs were The state level public sectors enterprises or state PSUs were established because of the rising need for public utilities in the established because of the rising need for public utilities in the states.states.

The infrastructure sectors in India are dominated by PSUs and The infrastructure sectors in India are dominated by PSUs and department-owned enterprises.department-owned enterprises.

In India Top PSU’s are crowned as In India Top PSU’s are crowned as “Navratna”“Navratna” category. category.

What is Navratna?What is Navratna?

Navratna is the most coveted status among public sector Navratna is the most coveted status among public sector units (PSU)units (PSU)..

A Navratna status makes a PSU a corporation in its strict form. A Navratna status makes a PSU a corporation in its strict form. It provides autonomy for decisions upto 1000 crores.It provides autonomy for decisions upto 1000 crores.

There are 3 categories of PSU’s. A category-1 PSU, category-There are 3 categories of PSU’s. A category-1 PSU, category-2 PSU and a Navratna.2 PSU and a Navratna.

What does a Navratna or a Miniratna What does a Navratna or a Miniratna status mean financially?status mean financially?

Miniratna category –1:- Can make decisions up to 500 crores Miniratna-category 2 :- Can make decisions up to 250 crores Navratna’s :- Can make decisions up to 1000 crores

Criteria for a PSU to become Criteria for a PSU to become Miniratna :Miniratna :

1.1. A profit making company for the last 3 consecutive years.A profit making company for the last 3 consecutive years.

2.2. Net worth should be positive. Net worth should be positive.

3.3. If a company fulfills 1 & 2 above, then it is a Category 2 If a company fulfills 1 & 2 above, then it is a Category 2 Miniratna. Miniratna.

4.4. If a company fulfills 1 & 2 above and has a Pre-tax profit of If a company fulfills 1 & 2 above and has a Pre-tax profit of

30 crores or more, then it is a Category 1 Miniratna.30 crores or more, then it is a Category 1 Miniratna.

How does a Miniratna Category 1 How does a Miniratna Category 1 PSU become a Navratna?PSU become a Navratna?

1)1) Having Schedule ‘A’ and Miniratna Category-1 status. Having Schedule ‘A’ and Miniratna Category-1 status.

2)2) Having at least three ‘Excellent’ or ‘Very Good’ Having at least three ‘Excellent’ or ‘Very Good’ Memorandum of Understanding (MoU) ratings during the Memorandum of Understanding (MoU) ratings during the last five years. last five years.

3)3) Having a composite score of 60 or above out of 100 marks Having a composite score of 60 or above out of 100 marks based on its performance during the last three years on the based on its performance during the last three years on the following six identified efficiency parameters performance following six identified efficiency parameters performance indicators): indicators):

4)4) Performance Parameters Maximum marks NetPerformance Parameters Maximum marks Net Profit/Net Worth25Manpower cost / cost of production or Profit/Net Worth25Manpower cost / cost of production or services15Gross margin as capital employed15Gross profit services15Gross margin as capital employed15Gross profit as Turnover15Earnings per Share10Inter-Sectoral as Turnover15Earnings per Share10Inter-Sectoral comparison based on Net profit to net worth20Total100comparison based on Net profit to net worth20Total100

Performance ParametersMaximum

marks

Net Profit/Net Worth 25

Manpower cost / cost of production or services 15

Gross margin as capital employed 15

Gross profit as Turnover 15

Earnings per Share 10

Inter-Sectoral comparison based on Net profit to net worth

20

Total 100

Navratnas in IndiaNavratnas in India

1.1. Bharat Electronics Limited Bharat Electronics Limited 2.2. Bharat Heavy Electricals Bharat Heavy Electricals

Limited [BHEL]Limited [BHEL]3.3. Bharat Petroleum Corporation Bharat Petroleum Corporation

Limited Limited 4.4. Coal India Limited Coal India Limited 5.5. GAIL (India) Limited GAIL (India) Limited 6.6. Hindustan Aeronautics Limited Hindustan Aeronautics Limited 7.7. Hindustan Petroleum Hindustan Petroleum

Corporation Limited Corporation Limited 8.8. Indian Oil Corporation Limited Indian Oil Corporation Limited

9.9. Mahanagar Telephone Nigam Mahanagar Telephone Nigam LimitedLimited

10.10. National Aluminium Company National Aluminium Company Limited Limited

11.11. NMDC Limited NMDC Limited 12.12. NTPC Limited NTPC Limited 13.13. Oil & Natural Gas Corporation Oil & Natural Gas Corporation

Limited Limited 14.14. Power Finance Corporation Power Finance Corporation

Limited Limited 15.15. Power Grid Corporation of Power Grid Corporation of

India Limited India Limited 16.16. Rural Electrification Rural Electrification

Corporation Limited Corporation Limited 17.17. Shipping Corporation of India Shipping Corporation of India

Limited Limited 18.18. Steel Authority of India Steel Authority of India

LimitedLimited

Case Study 1:- BALCOCase Study 1:- BALCO

Bharat Aluminium Company Bharat Aluminium Company LimitedLimited

Company profileCompany profile

Set up in 1965 at Korba Set up in 1965 at Korba

Manufacture aluminium rods and semi-fabricated productsManufacture aluminium rods and semi-fabricated products

Fabrication unit in BidhanbaghFabrication unit in Bidhanbagh

270 MW power plant270 MW power plant

Refining capacity of BALCO is 2, 00,000 tonnesRefining capacity of BALCO is 2, 00,000 tonnes

THE DISINVESTMENT THE DISINVESTMENT DECISIONDECISION

Government of India had 100% stake before 1997Government of India had 100% stake before 1997

Disinvestment Commission recommended immediate Disinvestment Commission recommended immediate divestment of 40%divestment of 40%

26% within 2 years and the remaining stake at an appropriate 26% within 2 years and the remaining stake at an appropriate time thereafter.time thereafter.

Later, in 1998 the Disinvestment Commission revised its Later, in 1998 the Disinvestment Commission revised its recommendationrecommendation

…… …….conti .conti

Government to consider 51% divestmentGovernment to consider 51% divestment

Transfer of ManagementTransfer of Management

BALCO's equity being reduced by 50%BALCO's equity being reduced by 50%

Government received Rs. 244 crore from the capital Government received Rs. 244 crore from the capital restructuringrestructuring

Strategic sale process for BALCO started in late 1997 and Strategic sale process for BALCO started in late 1997 and finally came to end in 2nd March 2001finally came to end in 2nd March 2001

51% stake was sold to Sterlite Industries @ Rs. 551.50 crore.51% stake was sold to Sterlite Industries @ Rs. 551.50 crore.

Government thus recovered Rs 827.50 crore from this Government thus recovered Rs 827.50 crore from this privatization.privatization.

POST SALE SCENARIOPOST SALE SCENARIO

Number of doubts have been raisedNumber of doubts have been raised

TransparencyTransparency

ValuationValuation

Protection of employees’ interestsProtection of employees’ interests

CONCLUSIONCONCLUSION

A combination of inappropriate procedure, undue haste and A combination of inappropriate procedure, undue haste and unwarranted secrecy had created a veritable mess.unwarranted secrecy had created a veritable mess.

Claims on the lack of transparency are being continued till Claims on the lack of transparency are being continued till date.date.

Thus Thus Corruption and lack of accountability still remain the Corruption and lack of accountability still remain the two worms eating away the Indian economy.two worms eating away the Indian economy.

Case Study 2:- VSNLCase Study 2:- VSNL

Disinvestment Of :Disinvestment Of :VIDESH SANCHAR NIGAM LTDVIDESH SANCHAR NIGAM LTD

Introduction:Introduction: In 1947, the Overseas Communication Service (OCS) was In 1947, the Overseas Communication Service (OCS) was

established in the Department of Telecommunications (DoT).established in the Department of Telecommunications (DoT). Videsh Sanchar Nigam Ltd (VSNL) was created from the OCS as a Videsh Sanchar Nigam Ltd (VSNL) was created from the OCS as a

government owned corporate in 1986.government owned corporate in 1986. enable greater freedom to managers to plan, operate, develop and enable greater freedom to managers to plan, operate, develop and

accelerate the international telecommunication services.accelerate the international telecommunication services. Compared with 2.69 billion telephone minutes in 2000-1, in 1986-Compared with 2.69 billion telephone minutes in 2000-1, in 1986-

1987 the figure was 0.13 billion minutes1987 the figure was 0.13 billion minutes The ratio of inbound to outbound calls had been 4:1 in 2001.The ratio of inbound to outbound calls had been 4:1 in 2001. One important reason for this is the discriminatory pricing byOne important reason for this is the discriminatory pricing by

VSNLVSNL

VSNLVSNLAnnual Report, 2000-2001Annual Report, 2000-2001

total revenue Rs 6,430.7 crore

profit after tax Rs 1,778.8 crore

earnings per share Rs 62.41

dividend per share Rs 50.00

debt Rs 0

P/E ratio of each VSNL share 4.68

fixed revenue agreement paid to DOT Rs 2,734 crore

Paid to foreign operators Rs 1,386 crore

DISINVESTMENT IN VIDESH SANCHAR DISINVESTMENT IN VIDESH SANCHAR NIGAM LIMITEDNIGAM LIMITED

1) Government had approved sale of 25% equity share holding out of a total 1) Government had approved sale of 25% equity share holding out of a total government share holding of 52.97% in VSNL on 5.02.2002. The total paid-up government share holding of 52.97% in VSNL on 5.02.2002. The total paid-up capital of VSNL is Rs.285 crore, the Govt. holding being Rs.151crore. capital of VSNL is Rs.285 crore, the Govt. holding being Rs.151crore. Rs.71.25crore of this equity is being sold to M/s Panatone (Tata Group) at a Rs.71.25crore of this equity is being sold to M/s Panatone (Tata Group) at a price of Rs. 1439 crore.price of Rs. 1439 crore.

2) Government had decided to disinvest in VSNL in January 2001 and the 2) Government had decided to disinvest in VSNL in January 2001 and the advertisement for inviting Expression of Interest was issued in February 2001. advertisement for inviting Expression of Interest was issued in February 2001. Two bids were received.Two bids were received.

3) SBI Capital Markets Ltd. and CSFB were appointed as the advisors at a fee of 3) SBI Capital Markets Ltd. and CSFB were appointed as the advisors at a fee of 0.19% of the transaction value.0.19% of the transaction value.

4) the Government has sold its shares at a price of Rs. 202 per share, taken 4) the Government has sold its shares at a price of Rs. 202 per share, taken additional amount as dividend, special dividend and dividend tax.additional amount as dividend, special dividend and dividend tax.

5) The market price of VSNL shares as on 1.2.2002 was Rs.158/-. the Government 5) The market price of VSNL shares as on 1.2.2002 was Rs.158/-. the Government would gain more than Rs. 350 crore every year.would gain more than Rs. 350 crore every year.

6) The strategic partner has been provided a call option for the 5th year, 1.97% 6) The strategic partner has been provided a call option for the 5th year, 1.97% share were given to employeesshare were given to employees

7) (VSNL) underwent a strategic sale to the Tata Group in April 20027) (VSNL) underwent a strategic sale to the Tata Group in April 2002

REASONS FOR DISINVESTMENTREASONS FOR DISINVESTMENT

The Ministry of Disinvestment cited the non availability of funds for The Ministry of Disinvestment cited the non availability of funds for critical areas like education, health and social infrastructure because of critical areas like education, health and social infrastructure because of fiscal burden in the flow of government funds into PSUs, as a strong fiscal burden in the flow of government funds into PSUs, as a strong argument for the disinvestment. There was also a need to stem further argument for the disinvestment. There was also a need to stem further outflow of resources into unviable, non-strategic PSUs. The divestment outflow of resources into unviable, non-strategic PSUs. The divestment was also expected to reduce the unmanageable public debt.was also expected to reduce the unmanageable public debt.

THE VALUATIONTHE VALUATION

The government had fixed a reserve price of Rs 1,218.375 crore for its 25% The government had fixed a reserve price of Rs 1,218.375 crore for its 25% stake in VSNL. the GOI intended to compensate the loss of monopoly stake in VSNL. the GOI intended to compensate the loss of monopoly through special concessions. through special concessions.

The government owned MTNL and BSNL would have to use VSNL as The government owned MTNL and BSNL would have to use VSNL as their ILD carrier for two years VSNL would also get a free license to their ILD carrier for two years VSNL would also get a free license to provide NLD, and a nationwide ISP license. provide NLD, and a nationwide ISP license.

VSNL possessed prime real estate in Mumbai and Delhi and also cable VSNL possessed prime real estate in Mumbai and Delhi and also cable capacities to facilitate international traffic. One of the major assets was the capacities to facilitate international traffic. One of the major assets was the cash stockpile of Rs 5,182 crore . cash stockpile of Rs 5,182 crore .

the dipping share prices of VSNL and the falling accounting rates that the dipping share prices of VSNL and the falling accounting rates that could lead to lower revenues. could lead to lower revenues.

One of the major issues involved during the valuation process included the One of the major issues involved during the valuation process included the management of real estate owned by VSNL. management of real estate owned by VSNL.

The disinvestment process stipulated that at least four VSNL surplus The disinvestment process stipulated that at least four VSNL surplus properties valued at Rs 778 crore would not be available and were to be properties valued at Rs 778 crore would not be available and were to be disassociated from VSNL after the disinvestment. disassociated from VSNL after the disinvestment.

Even so, real estate value that would accompany VSNL was around Rs Even so, real estate value that would accompany VSNL was around Rs 1,200 crore1,200 crore

CONCLUSIONCONCLUSION

The privatisation of VSNL is seen as leading to public expenditure The privatisation of VSNL is seen as leading to public expenditure accountability through a realisation of higher return on the government’s asset accountability through a realisation of higher return on the government’s asset formation. formation.

It also leads to an appreciation of the remaining shares that are held by the It also leads to an appreciation of the remaining shares that are held by the government. government.

the process is a step towards the provision of better quality communication the process is a step towards the provision of better quality communication services at the most competitive prices. Public flotation of stock might have led services at the most competitive prices. Public flotation of stock might have led to better values for VSNL's stock, had the company been correctly `prepared' to better values for VSNL's stock, had the company been correctly `prepared' for privatisation. for privatisation.

Thus, disinvestment of VSNL was clouded with controversies and speculations Thus, disinvestment of VSNL was clouded with controversies and speculations and this fact further indicates the failure of the disinvestment policy adopted in and this fact further indicates the failure of the disinvestment policy adopted in the case of VSNL, and also highlights the wrong reasons for which the the case of VSNL, and also highlights the wrong reasons for which the disinvestment of VSNL took place and its ultimate failure to match the required disinvestment of VSNL took place and its ultimate failure to match the required expectation of such a step. expectation of such a step.

This case on VSNL further corroborates to the fact, that the disinvestment This case on VSNL further corroborates to the fact, that the disinvestment policies adopted in India have been a failure so far.policies adopted in India have been a failure so far.