This Presentation will give a brief Idea about the "Disinvestment Policy of India". The presentation gives a brief idea about the Approaches, Objectives, Importance, Criticism, Challanges of the Disinvestment Policy. It will give a brief idea about the amount received by Disinvestment in India. The presentation covers the Union Budget of India 2017.

1. A
presentation
on
“DISINVESTMENT POLICY OF INDIA”
By
Nikhil gupta

2. WHAT IS DISINVESTMENT?
• Disinvestment can be defined as the action of an
organisation or government selling or liquidating
an asset or subsidiary. It refers to sale from the
government, partly or fully, of a government-
owned enterprise.

3. DISINVESTMENT POLICY
WAS ADOPTED IN THE
YEAR 1991 DUE TO
INEFFICIENCIES AND
INCOMPETENCE OF THE
PUBLIC SECTOR UNITS.

4. New economic policy 1991
The new economic reforms of 1991 are also called as
• Liberalisation
• Privatisation
• Globalisation reforms
These three are the major reforms introduced during the 1991
economic reforms in order to increase the economic growth rate
and balance of payments.
The Disinvestment policy is a part of the privatisation which is
introduced in the reforms to increase the performance of the
PSUs.

5. DIFFERENT APPROACHES TO
DISINVESTMENT
• Minority Disinvestment: A minority disinvestment is one
such that, at the end of it, the government retains a
majority stake in the company, typically greater than
51%, thus ensuring management control.
• Majority Disinvestment: A majority disinvestment is one
in which the government, post disinvestment, retains a
minority stake in the company i.e. it sells off a majority
stake.
• Complete Privatisation: Complete privatisation is a form
of majority disinvestment wherein 100% control of the
company is passed on to a buyer.

6. OBJECTVES OF DISINVESTMENT
POLICY
• To reduce budgetary deficits.
• To overcome the problem of political involvement in
PSUs.
• Enable the government to concentrate on Social
development.
• To ensure proper planning and execution.
• To overcome the problem of corruption.

7. IMPORTANCE OF DISINVESTMENT
POLICY
• Financing the increasing fiscal deficit.
• Financing large-scale infrastructure
development.
• For investing in the economy to encourage
spending.
• For retiring Government debt- Almost 40-45% of
the Centre’s revenue receipts go towards
repaying public debt/interest .
• For social programs like health and education.

8. CRITICISM OF DISINVESTMENT
• The amount raised through disinvestment from 1991-
2001 was Rs. 2051 crores per year which is too low.
• The way money released by disinvestment is being
used, remains undisclosed.
• Disinvestment of profit making public sector units will
rob the government of good returns.
• Privatization programme is generally not been affected
through the public sales of shares.
• No monopoly is good.

9. CHALLENGES OF DISINVESTMENT
POLICY
• Social Problem
• Political Problem
• Economic Problem
• Lack of transparency
• Lack of co-operation and co-ordination

10. PHASES OF DISINVESTMENT POLICY
• Phase I –1991-92 to 1998-99
• Phase II –1999-00 to 2003-04
• Phase III –2004-05 to 2008-09
• Phase IV –2009-10 to 2013-14
• Phase V –2014 to current

11. Year
TotalReceipts (Rs. crore)
(Inflationadjusted to 2016 Prices)
Year
TotalReceipts (Rs. crore)
(Inflationadjusted to 2016 Prices
1991-92 17,314 2004-05 6,614
1992-93 9,868 2005-06 3590
1993-94 0 2006-07 0
1994-95 23,387 2007-08 8,469
1995-96 362 2008-09 0
1996-97 1,399 2009-10 38,748
1997-98 3,143 2010-11 33,881
1998-99 16,624 2011-12 19,418
1999-00 5,512 2012-13 30,507
2000-01 5,261 2013-14 18,304
2001-02 15,131 2014-15 26,901
2002-03 8,662 2015-16 33,690
2003-04 38,611 2016-17 46,246
Disinvestment of Public Sector Units in India

12. Union Budget 2017: Disinvestment target at Rs 72,500 crore;
3 Rail PSUs to be listed
• Government on February 1st 2017 announced that it will raise Rs 72,500 crore
through disinvestment of PSUs, including listing of three railways PSUs IRCTC,
IRFC and IRCON, and proposed merger and consolidation to create globally
competitive public sector units.
• Finance Minister Arun Jaitley said the government will put in place a revised
mechanism and procedure to ensure time-bound listing of identified CPSEs on
stock exchanges as listing will foster greater public accountability and unlock
their true value.

13. Latest News about Disinvestment
After many years, Centre on course to meet disinvestment target
• For the first time in many years, the Centre is expected to meet its
disinvestment target to rise close to ₹45,500 crore from its disinvestment
programme.
• The figure of Rs.44,500 crore is a revised one of the previously fixed one of Rs.
56,500 crore.
• The total amount of disinvestment in the year 2016-17 was Rs. 46,246 crores.
• The Centre’s total receipts from disinvestment are also estimated to be at an all-
time high this fiscal.