Is disinvestment a solution to the problem of public sector

in India?
The public sector no doubt has played a positive role in bringing about
economic development but it has certain limitation. It can be highlighted as:
1. Mounting losses
2. Low return on investment
3. Administrative problems
4. Underutilisation of capacity
5. Problems relating to planning and execution of manpower
Disinvestment can be the solution to these problems which are as follows:1. Raising resourcesThrough disinvestment of public Enterprises the Government expects to raise
resources. These resources will deal in much higher social priority areas such as
basic health, family, primary education, etc.

2. Restructuring of public enterpriseWhen revenues are raised it will be used for restructuring enterprises which
are on the verge of becoming sick, but can be revived
3. Rehabilitation of displaced personnelA part of money raised can be used of Rehabilitation or re-training of
displaced workers.
4. Raising productive efficiencyIt also looks to lower costs, improve productive efficiency, improve
innovative productions, etc.
5. Retiring public debtA part of the money can be used for buying back treasury bills from banks.
6. Eliminate political interferenceIt will free public sector from political interference & will increase efficiency.

7. Benefits to consumer
Disinvestment would benefit the consumers with better quality & lower
prices of goods & services
8. Modernization and technology up gradation
Disinvestment helps to modernize the technology
The disinvestment programme was initiated by the government in the year
1991.it implies the sale of public sector equity to the private sector and the
public. In the case of certain industries it can be partial, in some cases it can
be a complete one.
To achieve the objective, equities in PSUs are sold off in various phases
called as rounds. The first round was taken in 1991.subsequently in every
budget; targets are being fixed for disinvestment
Conclusion; - However benefits of disinvestment were not received since
disinvestment many times was hasty and unplanned initially.