Generating Financial Flexibility and Financial Performance through Disinvestment: A Comparative Study Disinvested and Non-Disinvested Public Sector Enterprises in India

The objective of this paper is to assess and compare the financial performance of disinvested and non-disinvested central public sector enterprises (PSEs) based on 19 ratios (pertaining to the profitability, efficiency, leverage, liquidity and productivity per manpower) over a period of 16 years (1991–92 to 2006–07). The result shows that disinvestment has played significant role in enhancing the financial performance of disinvested PSEs over a period of time compared to non-disinvested PSEs in majority of parameters.