Table of Contents
- 1 Where do disinvestment proceeds go?
- 2 Why is Indian government doing disinvestment?
- 3 How is disinvestment by the government a capital receipt?
- 4 What are the steps taken by the government to accelerate the disinvestment process in India?
- 5 How are capital receipts different from revenue receipts?
- 6 What are the objectives of disinvestment in public sector enterprises?
- 7 When did the disinvestment process start in India?
Where do disinvestment proceeds go?
In order to align the NIF with the disinvestment Policy, Government decided (17th January 2013) that the disinvestment proceeds, with effect from the fiscal year 2013-14, will be credited to the existing NIF which is a ‘Public Account’ under the Government Accounts and the funds would remain there until withdrawn/ …
What are the benefits of disinvestment?
Some of the benefits of disinvestment are that it can be helpful in the long-term growth of the country; it allows the government and even the company to reduce debt. Disinvestment allows a larger share of PSU ownership in the open market, which in turn allows for the development of a strong capital market in India.
Why is Indian government doing disinvestment?
The government chooses a disinvestment strategy to reduce the fiscal burden and raise money to meet public needs. They may also be done to privatise the assets. Disinvestment can realise the long-term growth of the country.
How the disinvestment proceeds should be utilized by the government?
The proceeds from disinvestment of CPSEs will be channelised into the National Investment Fund which is to be maintained outside the Consolidated Fund of India. 75\% of the annual income of the Fund will be used to finance selected social sector schemes, which promote education, health and employment.
How is disinvestment by the government a capital receipt?
Government receipts which either (i) create liabilities (e.g. borrowing) or (ii) reduce assets (e.g. disinvestment) are called capital receipts. Thus when govt. Funds raised from disinvestment reduce government assets (ii) Recovery of loan is also capital receipt as It reduces government assets.
What are the steps taken by the Government to accelerate the disinvestment process in India?
Government takes various steps to accelerate the disinvestment process including replacement of annual plan with rolling plans, Fast tracking of approval process and to make Disinvestment programme more inclusive by following an approach to reserve 20 per cent of shares on PSUs-OFS transactions for retail investors on …
What are the steps taken by the government to accelerate the disinvestment process in India?
Is disinvestment good for India UPSC?
Disinvestment is aimed at reducing the financial burden on the government due to inefficient PSUs and to improve public finances. It introduces competition and market discipline and helps to depoliticize non-essential services….Related Links.
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| Non Aligned Movement | JPSC |
How are capital receipts different from revenue receipts?
The primary difference between Capital Receipts vs Revenue Receipts is that Capital receipts are the receipts of non-recurring nature which either creates the liability of the company or reduces the company’s assets whereas revenue receipts are the receipts of recurring nature and are reported in the statement of …
What is disinvestment in public sector undertakings in India?
Disinvestment in Public sector undertakings in India, is not a process of public asset sales done by the Prime Minister of India on behalf of the Government of India. It can be directly offered for sale to the public or indirectly done through a bidding process.
What are the objectives of disinvestment in public sector enterprises?
The government aims at making use of disinvestment proceeds to finance various social sector and developmental programmes and also to infuse private capital, technology and best management practices in Central Government Public Sector Enterprises.
What is disinvestment of Public Sector Undertakings (PSUs)?
Disinvestment of public sector undertakings is one of the policy measures adopted by the government of India for providing financial discipline and improve the performance of this sector in tune with the new economic policy of Liberalization, privatization and Globalization.
When did the disinvestment process start in India?
The below table provides data regarding the disinvestment process which started in 1991 (barring 2 small units being CMC Limited and Patherele Concrete). Major disinvestment steps were taken in the past by the BJP -led NDA government between 1999 and 2004.