Terminology - Share Market:
Share
Disinvestment - 5 Points
1.
Disinvestment is when the central government sells the equity stocks it holds
in public sector units (PSUs) to individuals or / institutions.
2
.Disinvestment transfers the ownership of shares from central government to
another entity, at market prices and creates gains for the government
depending on the price.
3.
It is done when the PSU is not profitable or / the central government does not
want to continue in any business since the private sector has
penetrated that business.
4.
When funds raised from disinvestment are used to meet routine revenue
expenditure, it is undesirable as an asset is sold without creating
another asset.
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5
. Disinvestment has become a significant source of revenue for the
government, Rs. 40,000 crore is the estimated amount to be raised in
financial year 2014-15.
Courtesy:
Centre for Investment Education and Learning (CIEL). Contributions by
Girija Gadre, Arti Bhargava and Labdhi Mehta.
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