DIPAM Full Form
What is the full form of DIPAM?
DIPAM is also known as the Department of Investment and Public Asset Management. It was earlier called the department of disinvestment. It was set up as an independent ministry (The Ministry of Disinvestment) in December 1999. Then the Department of Disinvestments came into existence in May 2004 when the ministry was turned into a department of the Ministry of Finance. From 27 May 2004, it came under the ministry of finance. The department’s primary responsibility is to handle all the matters related to the management of central government investment, including equity in central public sector undertaking. It also handles all the matters related to the sale of central government equity. Other responsibilities of DIPAM are addressing issues like capital, restructuring, attracting investment through capital markets, etc.
Its four main areas of work are:
Strategic disinvestment
Minority stake sales
Asset monetisation
Capital restructuring
Strategic Disinvestment
It refers to selling a public sector holding to non-government entities like the private sector.
Importance of Strategic Disinvestment
It can be used for repaying government debts.
It can promote the practice of management skills and technology.
Expansion of the private sector will lead to an increased number of better job opportunities.
Minority Stake Sales
It happens when the government tends to sell a part of the public sector undertaking from its overall share holding.
Asset Monetisation
It refers to the process of creating new sources of revenue for the government and its entities by unlocking the economic value of utilised or underutilised public assets.
Capital Restructuring
It refers to the change in financial structure of a company to deal with the shift in the financial stability of business.
New guidelines have been laid by DIPAM for capital restructuring through consistent dividend policy, ensuring buyback of shares, issue of bonus shares and splitting of shares.
Frequently Asked Questions (FAQs)
It was renamed on 14 April 2016.
Disinvestment is defined as an act of government focused on selling shareholding.
Minor disinvestment, major disinvestment and complete privatisation are the ways in which we can approach strategic disinvestment.
Reducing financial burden, improving market competition and discipline, raising funds etc.
Finance minister Arun Jaitley announced the renaming of DIPAM.
The Secretary is the head of DIPAM.