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LATEST NEWS UPDATES | Will the government's stand on privatisation of public sector units help the economy? -K Bharat Kumar

Will the government's stand on privatisation of public sector units help the economy? -K Bharat Kumar

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published Published on Nov 24, 2019   modified Modified on Nov 25, 2019
-The Hindu

* What is the push behind the strategic disinvestment move? What are the gains?

The story so far: On November 20, the government announced that it would sell stakes in several public sector undertakings (PSUs) and even give up management control in some. The Central government will cede full management control to buyers in the case of oil marketing company Bharat Petroleum Corporation Ltd. (BPCL), Shipping Corporation of India (SCI) and Container Corporation of India Ltd (CONCOR). The government will transfer its 74.2% stake in THDC India Limited (formerly Tehri Hydro Development Corporation of India) and its 100% stake in North Eastern Electric Power Corporation Limited (NEEPCO) to another public sector unit and power distribution major, NTPC Ltd.

* Why do governments divest stake in public sector undertakings?

Some political parties that come to power believe that “the government has no business being in business”. That is, the government’s role is to facilitate a healthy business environment but the core competence of a government does not lie in selling fuel or steel at a profit. That is one reason that divestment is often a priority item in the election manifesto of such parties.

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The Hindu, 24 November, 2019, https://www.thehindu.com/business/Economy/will-the-governments-stand-on-privatisation-of-public-sector-units-help-the-economy/article30063710.ece


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