Preparing for the IAS Exam can be greatly enhanced by staying informed on current affairs. One such topic of national importance is the recent “Disinvestment of 23 PSUs” by the Indian Government. Let's delve deeper into this issue.
An Overview of the Disinvestment of 23 PSUs
The Indian Government is in the process of selling stakes in 23 Public Sector Undertakings (PSUs). The aim of this disinvestment is to fetch the right price and contribute towards the fiscal target of Rs 2.10 lakh crore for the financial year 2020-21.
The Backstory of PSUs and Disinvestment
Post-independence, PSUs were established to stimulate the growth of core sectors of the economy, promote balanced regional development, generate employment opportunities, and enhance export promotion. However, with changing times and growing competition, disinvestment has become a strategic move for the government.
Understanding Disinvestment
Disinvestment refers to the selling or liquidation of assets or subsidiaries by governments or organizations. This process can be triggered by various strategic, political, or environmental reasons.
Why is the Government Undertaking the Disinvestment of PSUs?The primary objective of disinvestment is to contain the fiscal deficit of the Government. With increasing competition, many PSUs are no longer profitable and are at risk of becoming sick units. Furthermore, several of these undertakings employ outdated technology and lack competitiveness. Hence, disinvestment emerges as a viable option.
The Disinvestment Procedure
The disinvestment procedure involves seeking suggestions from different ministries for suitable candidates, placing proposals for disinvestments for the consideration of the Cabinet, selecting an advisor, inviting bidders, and finalizing the sale.
A Way Forward
To ensure the success of the disinvestment process, it is essential to maintain transparency and fairness. Policy reforms need to be implemented, in consultation with all stakeholders. Also, creating a conducive environment for the effective functioning of private entities is crucial.
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