{"id":225789,"date":"2023-02-09T19:46:45","date_gmt":"2023-02-09T14:16:45","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=225789"},"modified":"2023-02-22T11:00:36","modified_gmt":"2023-02-22T05:30:36","slug":"explained-the-status-and-proceeds-of-disinvestment","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/explained-the-status-and-proceeds-of-disinvestment\/","title":{"rendered":"Explained | The status and proceeds of disinvestment"},"content":{"rendered":"\n

Source: <\/b>The post is based on the articl<\/span>e \u201cExplained | The status and proceeds of disinvestment\u201d <\/b>published in <\/span>The Hindu <\/b>on 9th February 2023.<\/b><\/p>\n

What is the News?<\/b><\/h2>\n

In the Union Budget for 2023-24, the government has set a disinvestment target of \u20b951,000 crore, down nearly 21% from the budget estimate for the current year and just \u20b91,000 crores more than the revised estimate.<\/span><\/p>\n

This is the lowest disinvestment target in seven years. Moreover, the Centre has also not met the disinvestment target for 2022-23 so far.<\/span><\/p>\n

What is Disinvestment?<\/b><\/h2>\n

Disinvestment or divestment is when the government sells its assets or a subsidiary, such as a Central or State public sector enterprise.<\/span><\/p>\n

Approaches to disinvestment: <\/b>There are three main approaches to disinvestment:<\/span><\/p>\n

\u2013 Minority disinvestment:<\/b> The government retains a majority in the company, typically greater than 51%, thus ensuring management control.<\/span><\/p>\n

\u2013 Majority disinvestment:<\/b> The government hands over control to the acquiring entity but retains some stake.<\/span><\/p>\n

\u2013 Complete privatization:<\/b> 100% control of the company is passed on to the buyer.<\/span><\/p>\n

Nodal Department:<\/b> The Union Finance Ministry has a separate department for undertaking disinvestment-related procedures called the Department of Investment and Public Asset Management (DIPAM).<\/span><\/p>\n

Why does the government go for disinvestment?<\/b><\/h2>\n

T<\/span>he government may disinvest in order to a)<\/strong> reduce the fiscal burden or bridge the revenue shortfall for that year, b)<\/strong> <\/span>finance the fiscal deficit, c)<\/strong> invest in the economy and development or social sector programmes, d)<\/strong> reduce government debt, e)<\/strong> e<\/span>ncourage private ownership of assets and trading in the open market.<\/span><\/p>\n

I<\/span>f disinvestment is successful, it also means that the government does not have to fund the losses of a loss-making unit anymore.<\/span><\/p>\n

How has disinvestment fared in India?<\/b><\/h2>\n
\"disinvestment\"
Source: The Hindu<\/figcaption><\/figure>\n

Different Central Governments over the last three decades have been able to meet annual disinvestment targets only six times.<\/span><\/p>\n

Since this current government came to power in 2014, it has met the disinvestment target twice: 2017-18 and 2018-19.<\/span><\/p>\n

The pandemic-induced uncertainty, the geopolitical conflict, and the associated risks have posed challenges before the plans and prospects of the government’s disinvestment transactions over the last three years.<\/span><\/p>\n

Nevertheless, the government has reaffirmed its commitment towards privatization and strategic disinvestment of Public Sector Enterprises by implementing the new Public Sector Enterprise (PSE) Policy and Asset Monetisation Strategy.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Source: The post is based on the article \u201cExplained | The status and proceeds of disinvestment\u201d published in The Hindu on 9th February 2023. What is the News? In the Union Budget for 2023-24, the government has set a disinvestment target of \u20b951,000 crore, down nearly 21% from the budget estimate for the current year… Continue reading Explained | The status and proceeds of disinvestment<\/span><\/a><\/p>\n","protected":false},"author":10317,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1566,3127,9],"tags":[10498],"class_list":["post-225789","post","type-post","status-publish","format-standard","hentry","category-daily-factly-articles","category-economy","category-public","tag-the-hindu","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/225789","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10317"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=225789"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/225789\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=225789"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=225789"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=225789"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}