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Indian Economy

Notes 12.6 Keywords

BRPSE: The Board of Reconstruction of Public Sector Enterprises advises the government on the
issue of restructuring PSEs, including cases where disinvestment, closure or sale is justified.

Disinvestment Proceeds Fund: The fund for financing of fresh employment opportunities and
investment, and for retirement of public debt.
Disinvestment: Disinvestments connote reducing the government stake in public sector.

Divestiture: It is a privatisation of ownership through the sale of equity.
MOU: A Memorandum of Understanding was signed with PSUs with the objective of giving
them more autonomy.

National Investment Fund: The realisation from the sale of minority shareholding of the
government in profitable PSEs would be channelized to this fund.
Privatisation: Privatisation is the process of involving the private sector in the ownership or
operation of a state-owned or public sector undertaking.

12.7 Review Questions

1. What is disinvestment?
2. What is the difference between privatisation and disinvestment?

3. What are the objectives of disinvestment?
4. Discuss the various methods of disinvestment.
5. Discuss the policy followed by the government regarding PSUs in 1991.

6. “Profit Making PSUs should not be disinvested.” Discuss the statement.
7. Discuss the policy of the present government regarding disinvestment.
8. What are the problems with privatisation in India?
9. Discuss the policy of India regarding the Navratnas.

Answers: Self Assessment

1. Public Sector Units 2. Memorandum of Understanding

3. Quantum 4. PSUs
5. efficiency 6. Disinvestments
7. money claims 8. public sector
9. Diseconomies 10. high-performing

11. disinvestment programme 12. opposition
13. India 14. 2011

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