Discuss the disinvestment policy and highlight its impact at the state

Question

Discuss the disinvestment policy and highlight its impact at the state level.

25 Aug 2021

Answer :

Word Count : 924

Disinvestment of public enterprises can be made in a number of ways:

1. The entire public enterprise can be sold to a private sector firm which is the highest bidder or otherwise. In this case both the ownership and control or management is transferred to the private firm. This happened when ‘Modem Food’, a public company, was sold to Hindustan Lever and Centaur Hotel in Bombay was sold to a private company.

2. The second way in which disinvestment in a public enterprise can be made is selling a part of the Government stake to a strategic private company. A strategic company is one which has a strategic interest in the public enterprise and has a capability to run it efficiently. The strategic buyer can be chosen by inviting tenders from the private companies.

3. Thirdly, the Government can offer for sale its shares of a public enterprise to the general public through the ___ _____ _______ ____ ________ ___ _____ ____ ______ ______.
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