About Strategic Disinvestment:
- Strategic disinvestment would imply the sale of a substantial portion of the Government shareholding of a central public sector enterprise (CPSE) of upto 50%, or such higher percentage as the competent authority may determine, along with transfer of management control.
- It involves the transfer of ownership and control of a public sector entity to some other entity, either private or public.
- What is the difference between strategic disinvestment/sale and disinvestment?
- Selling minority shares of Public Enterprises to another entity, be it public or private, is disinvestment. In this, the government retains ownership of the enterprise.
- On the other hand, when the government sells majority shares in an enterprise, that is strategic disinvestment/sale. Here, the government gives up the ownership of the entity as well.
- Objectives:
- Reduce Government Ownership;
- Raise Capital;
- Improve Efficiency;
- Promote Competition;
- Attract Private Investment;
- Focus on Core Functions;
- Reduce Fiscal Burden;
