Question

Disinvestment means:

• A. Acquiring small and medium industries
• B. Opening the market for global citizens
• C. Savings in the bank
• D. Privatisation of public sector or government companies

Hint:

Disinvestment means the government sells part of its ownership in public sector companies to private investors.

Answer 1

The Correct Option is D

Disinvestment refers to the process through which the government reduces its ownership or shareholding in Public Sector Undertakings (PSUs) by selling shares to private investors or the general public. The policy of disinvestment became especially important in India after the economic reforms of 1991. The main objectives of disinvestment are:
• Reducing financial burden on the government
• Improving efficiency of industries
• Encouraging private sector participation
• Generating government revenue
• Increasing competition in the economy When the government sells a significant portion of its ownership in public sector companies, the process moves toward privatization. Examples include reduction of government stake in:
• Airlines
• Banks
• Oil companies
• Manufacturing industries Option analysis:
• Option (A): Incorrect because disinvestment does not mean acquiring industries.
• Option (B): Incorrect because this relates more to globalization.
• Option (C): Incorrect because it is unrelated to banking savings.
• Option (D): Correct because disinvestment involves privatization or reduction of government ownership. Therefore, the correct answer is: \[ \boxed{\text{(D)}} \]