Gmp Section B Macro Economics Disinvestment Report

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Disinvestment : Is it necessary and useful in the current economic situation in India?

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Gmp Section B Macro Economics Disinvestment Report

  1. 1. Disinvestment : Is it necessary and useful in the current economic situation in India?<br />Anshuman Jaiswal (G09051)<br />Deepti Chand (G09055)<br />Gaurav Piplani (G09059)<br />Kaushik Chakraborty (G09063)<br />GMP, XLRI Jamshedpur<br />
  2. 2. Disinvestment implies that the government will sell part or whole of its holding in public sector enterprises. <br />Privatization Vs Disinvestment.<br />The transfer of ownership occurs when in an enterprise the dilution of government ownership is beyond 51 percent. <br />What is Disinvestment?<br />GMP, XLRI Jamshedpur<br />
  3. 3. A historic overview<br />Divestment of stake in central public sector units has netted Rs 53,400 Crore since 1991.<br />GMP, XLRI Jamshedpur<br />
  4. 4. Case of Modern Foods<br />GMP, XLRI Jamshedpur<br />
  5. 5. Modern: Post Disinvestment Highlights<br />GMP, XLRI Jamshedpur<br />
  6. 6. Government’s stake in public sector enterprises to remain above 51% <br />With the left parties out of the picture, UPA plans to roll forward its plan to disinvest.<br />No privatisation of government-owned banks and insurance companies. <br />Proposed a modest disinvestment proceeds of Rs 1,120 crore for FY 10.<br />Disinvestment in current scenario<br />GMP, XLRI Jamshedpur<br />
  7. 7. Stakeholders perspective<br />GMP, XLRI Jamshedpur<br />
  8. 8. Differentstands on Disinvestment<br />Left Right<br />GMP, XLRI Jamshedpur<br />
  9. 9. Private ownership would result in a selfish motive of maximizing profit Vs social welfare.<br />Disinvestment of PSUs might lead to mismanagement of material, natural and human resources.<br />In crisis, public entities would absorb the shock and protect the interest of the nation.<br />Mostly profit making firms are disinvested and eventually only sick firms will end up in government’s kitty<br />Reasons for No Disinvestment<br />GMP, XLRI Jamshedpur<br />
  10. 10. Reasons for Disinvestment<br />Improved Efficiency & Revenue Generation<br />Measure to reduce fiscal deficit<br />Management Indecision, Red tape and Political Interference<br />Private sector success & Government’s lack of focus<br />Global size & world class customer service.<br />GMP, XLRI Jamshedpur<br />
  11. 11. Reasons for Partial Disinvestment<br />GMP, XLRI Jamshedpur<br />
  12. 12. Who says there are no buyers of loss making companies?<br />Why not just sell loss making and not the profitable ones?<br />Why to keep Non strategic sector under Government control?<br />Points to ponder<br />GMP, XLRI Jamshedpur<br />
  13. 13. Thank You<br />GMP, XLRI Jamshedpur<br />

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