CA Foundation · Business Economics · Indian Economy
The sale of a part of the government's equity in a public sector undertaking to private investors, as pursued after 1991, is called:
The correct term is disinvestment. It refers to the government selling part of its equity in public sector undertakings to private investors, and it forms a core part of the privatisation strand of the 1991 reforms. The other terms relate to controls, currency value or currency notes.
- ADevaluation
- BDisinvestmentCorrect
- CDeregulation
- DDemonetisation
Explanation
Disinvestment means the government selling its equity holding in PSUs, and it is a key feature of privatisation under LPG. Deregulation means removing controls, devaluation is lowering a currency's official value, and demonetisation withdraws currency notes' legal tender status.
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