Problems and prospects of disinvestment policy in India

In the nineties, India's budgeting, fiscal deficits, and balance of payments problems kick started the government's urge to unlock the huge investments chained in the state owned enterprises (SOEs). The major thrust for Disinvestment Policy in India came through the Industrial Policy Statement 1991. The policy stated that the government would disinvest part of their equities in selected PSEs. However it did not state any cap or limit on the extent of disinvestment. It also did not restrict disinvestment to any class of investors. The main objective was to improve overall performance of the PSEs. In this context, this paper focuses on analyze the disinvestment process in Indian Public Sector and also highlights the disinvestment done was a Success or a Failure for the Indian Economy.