CSEET · Economic and Business Environment · Indian Economy
Disinvestment of a public sector enterprise, as pursued after 1991, means:
Disinvestment means the government sells part or all of its equity holding in a public sector enterprise. It is a central tool of privatisation under the 1991 reforms, aimed at raising resources and improving efficiency, and is the opposite of the government acquiring shares or increasing its support.
- AThe government selling part or all of its equity holding in the enterpriseCorrect
- BThe government acquiring a private company's shares
- CClosing down the enterprise and writing off its assets
- DIncreasing government's budgetary support to the enterprise
Explanation
Disinvestment is the sale of government's equity in public sector undertakings, a key part of privatisation. Acquiring shares is the reverse, and closure or higher budgetary support are different actions altogether.
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