Why is the Government of India disinvesting its equity in the Central Public Sector Enterprises (CPSEs)?
- The Government intends to use the revenue earned from the disinvestment mainly to pay back the external debt.
- The Government no longer intends to retain the management control of the CPSEs.
Which of the statements given above is/ are correct?
[UPSC Civil Services Exam – 2011 Prelims]
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Answer: (d)
Explanation:
Central Public Sector Enterprises
- These are those companies in which the direct holding of the Central Government or other CPSEs is 51% or more.
- These are administered by the Ministry of Heavy Industries and Public Enterprises.
- The Government does not necessarily intend to use the revenue earned from the disinvestment mainly to pay back the external debt. Hence, statement 1 is not correct.
- From time to time, the Government takes the decision to disinvest the CPSEs but largely it decides to retain the management control on case to case basis. Hence, statement 2 is not correct.
