The disinvestment of a public sector unit leads to _____.
Show answer & explanation
Correct answer: A
Explanation
- Disinvestment means that the government sells its stake in a public sector company.
- When the government sells its shares, its ownership of that company's assets diminishes.
- Consequently, the volume of the government's financial assets decreases.
- However, this generates immediate revenue for the government.
- The objective of disinvestment is to enhance the efficiency of the public sector and attract investment.
- This policy was adopted in India following the economic reforms.