Emerging issues of disinvesment in public enterprises (PEs)
Ubiquity, Volume 2006 Issue October | BY Vinay K. Srivastava
There has been phenomenal and tremendous growth of PE's in India. They were established to attain the 'commanding heights' of the economy of the country and achieve rapid growth of industrialization and economic development. Some of these PEs later became 'white elephant' and started incurring losses. Several of them became chronically sick industries. The Govt. declared the disinvestment process, which began in 1991 with the sale of minority stakes in some PE's, shifted focus to strategic sales during 1999-2000 to 2003-04. The present UPA Govt. announced that, all disinvestment will be considered on a transparent and consultative case-by-case basis. The Govt. has approved the constitution of a "National Investment Fund" comprising of proceeds from disinvestment. The present paper is an attempt to discuss same important issues such as restructuring, valuation of equity, Mechanism of disinvestment, Application of disinvestment proceeds, Parliamentary approval and political issues.