Question : The term "disinvestment" in the government budget refers to:
Option 1: Reduction in public expenditure
Option 2: Sale of government assets or shares in public sector enterprises
Option 3: Increase in subsidies
Option 4: Borrowing from international financial institutions
Correct Answer: Sale of government assets or shares in public sector enterprises
Solution : The correct answer is (b) Sale of government assets or shares in public sector enterprises.
In the context of the government budget, the term "disinvestment" refers to the process of selling government-owned assets or shares in public sector enterprises (PSEs) to private entities or the public. This action aims to reduce the government's ownership and control in PSEs and can be done through methods such as Initial Public Offerings (IPOs), strategic sales, or auctions.
Disinvestment is a way for the government to raise funds and reduce its financial burden. By selling government assets or shares, it brings in revenue that can be used for various purposes, such as reducing fiscal deficits, financing development projects, or meeting other expenditure requirements.
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