In terms of economic system, what is disinvestment? • Disinvestment i
| In terms of economic system, what is disinvestment?
A. Privatisation of the public sector enterprises
B. Increasing the value of share of a company
C. Decreasing the value of share of a company
D. Foreign investments in defence sector
Right Answer is: A
SOLUTION
• Disinvestment is the process of reducing the government’s share or liquidation of assets in public sector enterprises.
• It is the sale of shares of the government in these companies to raise the money or reduce the fiscal burden on the exchequer.
• It can be also said as the Privatisation of the public sector enterprises, especially in case of Strategic disinvestment where the control & ownership of the public sector enterprises is transferred to the buyer.
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