Topic: Government Budgeting.
5. Disinvestment is no doubt a bold step taken by the government but its execution is critical for it to be successful and achieve desired outcomes. Analyze. (250 words)
Reference: The Hindu
Why the question:
Two Public Sector Banks and one general insurance company are expected to be disinvested this year, Finance Minister Nirmala Sitharaman announced during Budget presentation in Lok Sabha.
Key Demand of the question:
To write about the advantages of disinvestment and the need to have flawless execution of the same to accrue those advantages.
Directive:
Analyze – When asked to analyse, you have to examine methodically the structure or nature of the topic by separating it into component parts and present them as a whole in a summary.
Structure of the answer:
Introduction:
Begin by explaining disinvestment and cite some recent examples
Body:
In detail bring out the multiple advantages associated with disinvestment ranging from revenue to better management of PSU’s. Substantiated with examples.
Write about the bold stance taken by the government in this year’s budget for disinvestment and mention the steps it needs to take for the process to acheieve desired results. create confidence in the sale processes, ensure a semblance of fair valuations, give officers some cover from potential post-transaction witch-hunts by auditors and investigating agencies, sequence the sales so that the economy does not face shocks or create monopolies and manage electoral pressures in jurisdictions where these units would be located.
Conclusion:
Conclude with a way forward.
