CMA Foundation · Fundamentals of Business Economics and Management · Economic and Business Environment
The Government of India sells part of its equity holding in a public sector company to private investors but retains majority ownership. This process is best described as:
This process is disinvestment. It means the government sells some or all of its shareholding in a public sector enterprise to private investors, raising funds and encouraging efficiency, and it is a key part of the privatisation strand of India's economic reforms.
- ANationalisation
- BDevaluation
- CDisinvestmentCorrect
- DDemonetisation
Explanation
Disinvestment means the government selling part or all of its equity in public sector enterprises. Nationalisation is the reverse (taking private firms under state control), devaluation relates to currency value, and demonetisation withdraws legal tender status of notes.
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