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disinvestment

Published on Nov 20, 2015

Merits and demerits of disinvestment

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PRESENTATION OUTLINE

1.

LAUNCH

" the business of the government is not to be in business"- John Moore
Photo by Stuck in Customs
2.

MERITS OF DISINVESTMENT

  • Increase economic activity
  • Beneficial effect on the capital market
  • Wider distribution of wealth
  • Expose privatised companies to market disciplines
  • Help privatised companies become self reliant
Photo by EJP Photo
3.

DEMERITS

  • Selling of profit -making and dividend paying PSU would result in loss of regular income
  • Chances of 'asset stripping'.PSU's have valuable assets.Ex: plant and machinery,land
  • Disinvestment includes the disposal of both profit making ,as well as potentially viable PSU's
Photo by Leo Reynolds

Naina Nedungadi