Challenges Before Disinvestment

Process of disinvestment is not favored socially as it is against the interest of socially disadvantageous people.

  • Political pressure from left and opposition
  • Loss making units don’t attract investment so easily
  • Lack of well-defined investment policy

The disinvestment process needs to be taken up more seriously by the government. The Government should try to come out with a time bound programme to conduct the process with transparency in all the activities need to reach. Some consensus is very essential. Only then the real benefits can be reaped.

Disinvestment: Arguments in Favour and Against

Favour

  • Trade unionism and political and political interference often lead to halting of PSUs projects thereby hampering the efficiency in long run.
  • Private ownership does not guarantee the efficiency (Rangarajan Committee 1993.)
  • It will lead to monopoly and oligopolistic practices by corporate.

Against

  • It is against the sociologist ideology of equal distribution of resources amongst the population.
  • Private players work out-of Red-tapism bureaucratic mentality and focus on performance-driven culture and effectiveness (Disinvestment Commission 1996).
  • Problem of disguised unemployment and outdated skill in PSUs employee are the major cause of inefficiency.

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