Question

The Government of India is going to disinvest its ownership in one of the government companies. Even after disinvestment, the government will have a minority ownership in that company, but the company itself will be managed by a private party.

Which of the following ways of privatisation is adopted by the Government of India in the above example?

• A. Selling ownership to a private player
• B. Reserving business operations for private sector
• C. Holding the ownership by government while allowing private players to manage it
• D. Entering into a public-private partnership

Answer 1

The correct option is A Selling ownership to a private player

Disinvestment means the selling of ownership by the government to the private players. Only if the majority of the ownership is with the private players, it will be considered as privatisation, just like the government had sold its holdings in Maruti Udhyog Limited to Suzuki.