Question : The government's disinvestment refers to the ____________.
Option 1: Sale of shares in public sector enterprises
Option 2: Reduction in defense expenditure
Option 3: Repayment of external debt
Option 4: Increase in indirect taxes
Correct Answer: Sale of shares in public sector enterprises
Solution : The correct answer is (A) Sale of shares in public sector enterprises.
Disinvestment is the process through which the government sells its equity or ownership stake in public sector enterprises (PSUs) to private entities or the public. It involves the transfer of ownership and control of the PSU from the government to private shareholders.
The purpose of disinvestment can vary and may include objectives such as raising funds for the government, promoting private sector participation, improving the efficiency and competitiveness of PSUs, and reducing the government's financial burden.
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