THE IMPACT OF DISINVESTMENT POLICY ON THE INDIAN ECONOMY

Abstract

Disinvestment is the process of selling off or reducing government ownership in a public sector enterprise or asset, and it can have significant impacts on the Indian economy. While disinvestment can reduce the government's fiscal burden and promote efficiency and competitiveness, it can also result in revenue loss, job losses, market volatility, concentration of wealth, and strategic implications. The benefits of disinvestment include freeing up resources for other priority areas and promoting private sector participation, which can lead to better management practices, increased productivity, and enhanced innovation. However, disinvestment can also lead to job losses, exacerbate income inequality, and negatively impact investor confidence and the broader economy. It is important to carefully consider the strategic implications of disinvestment, especially when it involves critical infrastructure or defense assets. In conclusion, while disinvestment can have benefits, it needs to be carried out in a careful and considered manner to avoid negative consequences for the economy and society as a whole.