DMPQ: What is Disinvestment? What are its advantages and disadvantages.

Disinvestment is the practice of selling of shares by an organisation ( generally used for government) to the private sector. Disinvestment is de-nationalization of less than 100 per cent ownership transfer from the state to the private sector. The objective of disinvestment is to mobilise the resources, To use the resources for productive purposes like social sector and health infrastructure.



  • Help to mobilise the resources
  • Help to bridge fiscal deficit.
  • To get rid of ill managed or sick PSU’s
  • To bring efficiency in the PSU, the operational expertise and management know how.
  • The resources generated can be utilised for productive purpose like social sector and health.
  • Removal of political interference
  • Financing large scale infrastructure via investment.



  • Not a sustainable source for bridging fiscal deficit.
  • Industrial restructuring is also required with disinvestment.
  • Setting the target can lead to the distress selling.

Quote AIR India problem,  in the year 2016-17 government could divest only Rs. 27,917 crores against the target of 45,000 crores. Hence resource mobilisation could not take place as per the expectations of the government.


KPSC Notes brings Prelims and Mains programs for KPSC Prelims and KPSC Mains Exam preparation. Various Programs initiated by KPSC Notes are as follows:- For any doubt, Just leave us a Chat or Fill us a querry––

Hope we have satisfied your need for KPSC Prelims and Mains Preparation

Kindly review us to serve even better

KPSC Mains Test Series 2019

20 Quality mock tests and GS Mains Notes

Mains Test Series and Notes

Mains Printed Notes (With COD)

KPSC Prelims Test Series 2019

24 Quality mock tests and GS Prelims Notes

Prelims Test Series and Notes

Prelims Printed Notes (With COD)

Subscribe to KPSC Notes

Never Miss any KPSC important update!

Join 611 other subscribers