Disinvestment
- Disinvestment means sale or liquidation of assets by the government, usually Central and state public sector enterprises, projects, or other fixed assets.
- Main Objectives of Disinvestment in India:
- Reducing the fiscal burden on the exchequer
- Improving public finances
- Encouraging private ownership
- Funding growth and development programmes
- Maintaining and promoting competition in the market
- Types:
- Token Disinvestment: Selling minority shares of Public Enterprises, to another entity be it public or private is disinvestment. In this the government retains ownership of the enterprise.
- Strategic Disinvestment: When the government sells majority shares in an enterprise, that is strategic disinvestment/sale. Here, the government gives up the ownership of the entity as well.
Differences between Miniratna, Navratna, and Maharatna
|
Criteria |
Miniratna | Navratna |
Maharatna |
|
Eligibility |
Profit for 3 years, positive net worth | Strong financials, good market share | Significant track record, large turnover |
|
Financial Autonomy |
Limited (investment up to 30-50% of net worth) | High (investment up to 15% of net worth) | Maximum (investment up to Rs. 5,000 crore or 15% of net worth) |
|
Investment Decision Power |
Limited to certain thresholds | Higher autonomy in investment decisions | Highest autonomy in making strategic decisions |
|
Examples |
NFL, IRCTC, MTNL | ONGC, BHEL, IOCL | BPCL, NTPC, SAIL |