What is the hypothesis of disinvestment …

1. Disinvestment is defined as the action of a government aimed at selling or liquidating its shareholding in a public sector enterprise in order to get the government out of the business of production and increase its presence and performance in the provision of public goods and basic public services such as infrastructure, education, health, etc.
2. Funds from disinvestment would also help in reducing public debt and bring down the debt-to-GDP ratio while competitive public undertakings would be enabled to function effectively.

Disinvestment – Objectives

The main objectives of disinvestment in India are:

1. To reduce the financial burden of the sick, loss-making PSU’s on the Government
2. To improve public finances
3. To introduce competition and market discipline
4. To fund growth, social sector welfare
5. To encourage a wider share of ownership
6. To depoliticize non-essential servicesv