Disinvestmentof public sector enterprises in India -A study

The public sector enterprises have been playing a vital role in the development of Indian economy. Hence more importance has been given to the development of public sector enterprises since the beginning of planning period and these were protected fully by providing budgetary support. However, the performance of some public sector enterprises has not been satisfactory as compared with private sector enterprises in the same industry and the government is not in a position to justify budgetary support. Further, it is very essential that both the public and private sector must become competitive in the changed economic environment. Therefore, the Government of India has decided to disinvest the equity of some selected public sector enterprises to improve management, enhance availability of resources and yield resources for the exchequer. The Department of Disinvestment has been looking after the disinvestment process since its inception. As a result of disinvestment decision initiated in India,our country collected Rs47646.43 crores from 1991–92 till the end of financial year 2004–05. The receipts from disinvestments are deposited in the Disinvestment Proceeds Funds and used for financing fresh employment opportunities, investments and servicing public debt. The present study covers the important aspects of disinvestment like disinvestment policy, status of disinvestment in India, state wise disinvestment, impact and issues of disinvestment. Further, the study is purely based on the secondary data collected from the website, daily newspapers and magazines etc. The disinvestment of public sector units no doubt has favourable impact on Indian economy in general and industrial sector in particular if proper care is taken towards the issues of disinvestment. It requires proper course of action and strategy to avoid improper use of cash inflows from the process of disinvestments.