Question : Disinvestment refers to the sale of government equity or shares in:
Option 1: Public sector enterprises
Option 2: Private sector enterprises
Option 3: Foreign sector enterprises
Option 4: Cooperative sector enterprises
Correct Answer: Public sector enterprises
Solution : The correct answer is (a) Public sector enterprises
Disinvestment refers to the process of selling government equity or shares in public sector enterprises. It involves the reduction of the government's ownership stake in these enterprises by selling off a portion of its shares to private investors, institutions, or the general public.
The purpose of disinvestment in public sector enterprises can vary, but it is often done to achieve certain objectives such as reducing the government's fiscal burden, promoting efficiency and competitiveness in the enterprises, attracting private capital and expertise, and encouraging wider public ownership and participation in the economy.
By disinvesting from public sector enterprises, the government aims to bring in private sector discipline, enhance corporate governance, promote competition, and unlock the value of these enterprises. It can also help in raising funds for the government, which can be used for various developmental or welfare purposes.
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