Bissoy.com
Doctors Medicines MCQs Q&A

Why is the Government of India disinvesting its equity in the Central Public Sector Enterprises (CPSEs)? 1. The Government intends to use the revenue earned from the disinvestment mainly to pay back the external debt. 2. The Government no longer intends to retain the management control of the CPSEs. Which of the statements given above is/are correct?

Why is the Government of India disinvesting its equity in the Central Public Sector Enterprises (CPSEs)? 1. The Government intends to use the revenue earned from the disinvestment mainly to pay back the external debt. 2. The Government no longer intends to retain the management control of the CPSEs. Which of the statements given above is/are correct? Correct Answer Neither 1 nor 2

The correct answer is Neither 1 nor 2.

Key Points

  • Central Public Sector Enterprises
    • These are those companies in which the direct holding of the Central Government or other CPSEs is 51% or more.
    • These are administered by the Ministry of Heavy Industries and Public Enterprises.
    • These are further classified into Strategic CPSE and non-strategic CPSE.
  • Disinvestment means the sale or liquidation of assets by the government, usually Central and state public sector enterprises, projects, or other fixed assets.
  • The government undertakes disinvestment to reduce the fiscal burden on the exchequer, or to raise money for meeting specific needs, such as to bridge the revenue shortfall from other regular sources.
  • External debt is the portion of a country's debt that is borrowed from foreign lenders, including commercial banks, governments, or international financial institutions.
  • The Government does not necessarily intend to use the revenue earned from the disinvestment mainly to pay back the external debt. Hence, statement 1 is not correct.
  • In 2020, India’s debt was around ₹147 lakh crore against this year’s estimated GDP of ₹194 lakh crore. This year, the government plans to borrow another ₹12 lakh crore.
  • From time to time, the Government takes the decision to disinvest the CPSEs but largely it decides to retain the management control on case to case basis. Hence, statement 2 is not correct.

Related Questions

Consider the following statements with reference to Disinvestment 1. All the proceeds from the disinvestment of Centre Public Sector Enterprises will be channelized to National Investment Fund (NIF) 2. The Department of Economic Affairs under Ministry of finance is the nodal agency for disinvestment Which of the statements given above is/are correct? 
The UNCTAD reported on the contributions of the private sector to global GDP recently. In this context, consider the following statements:
1. The public sector debt constitutes a greater part of GDP than the private sector debt.
2. The UNCTAD predicts that the private sector will enable the achievement of Sustainable Development Goals by 2030.
Which of the above statements is/are true?
With reference to the National Monetisation pipeline (NMP), consider the following statements. 1. It is an effort to list out the government’s infrastructure assets to be sold over the next four years. 2. Currently, only assets of central government line ministries and CPSEs in infrastructure sectors have been included. 3. Monetization through disinvestment and monetization of non-core assets is also included in the NMP. Which of the statements given above is/are correct?
The question below consists of a set of labelled sentences is given. Out of the four options given, select the most logical order of the sentences to form a coherent paragraph. P- The effect of privatisation on government economics is largely positive. Q- This can very well be judged by the speed at which the government is privatising various industries that were once governed by the public sector. R- Many industries under the public sector in our country had been suffering major losses owing to poor management, inadequate knowledge of the owners and lack of proper resources. S- The brunt of this loss had to be borne by the government as public enterprises were funded by the government.
The reasons for Economic reforms introduced in India are mainly on:
1. Public sector was given an important role in development policies during 1951 - 1990
2. The performance of the majority of public enterprises was disappointing
3. They were incurring huge losses because of inefficient management
4. Policy changes were proposed to go public sector underatkings
Select the correct answer:
With reference to the governance of public sector banking in India, consider the following statements: 1. Capital infusion into public sector banks by the Government of India has steadily increased in the last decade. 2. To put the public sector banks in order the merger of associate banks with the parent state Bank of India has been affected. Which of the statements given above is/are correct?
Statement : Many private sector banks have reduced interest rate on housing loans in comparison to public sector banks.

Courses of Action :
I. The case should be raised before the regulatory authority for investigation by the public sector banks as they cannot follow such reduction.
II. Public sector banks must adopt such policy to remain in competition.
III. The public sector banks should advertise their special feature repeatedly so that they do not lose their future customers.
Which two classes use the Shape class correctly?
A. public class Circle implements Shape { private int radius; }B. public abstract class Circle extends Shape { private int radius; }C. public class Circle extends Shape { private int radius; public void draw(); }D. public abstract class Circle implements Shape { private int radius; public void draw(); }E. public class Circle extends Shape { private int radius; public void draw() { /* code here */ } }F. public abstract class Circle implements Shape { private int radius; public void draw() { /* code here */ } }
Read the passage carefully and select the best answer to each question out of the given four alternatives.
Public opinion may be passive and false or active and real. It is claimed in theory that all governments are ultimately based on the opinion or sanction of the governed. But we find that in practice the people's rights are often trodden down and tyranny and oppression are allowed to continue. The government does it not because the people want it to do so but because they are too idle, too uneducated and too disunited or timid to oppose the govern ment. Such public opinion is passive and false and not an active verdict. But when we find people alert, intelligent and determined to let the government know their will, when they want to exercise actively their voice in the management of their country, we have an instance of true or active public opinion. True public opinion is formed by and expressed through the press, the platform, political parties and educational institutions. These have sacred duties to perform, duties on which depends the ultimate good of the entire community. The press today wields a tremendous influence, So it should support the causes and move ments and condemn the wrong one's and thus teach people to form correct opinion. A free and fair press ventilates the grievances of the public. Thus a healthy relationship develops between the people and the government through out an unbiased press. Political parties also help to create and regulate opinions. No less important part is played by the educational Institutions which train the minds of the young people who will be the citizens of tomorrow. It has been said that modern Germany and China have been made by their universities. It is necessary that the young and the growing minds should imbibe the spirit of fellow-feeling, the spirit of tolerance, the habit of compromise, and show due regard for the feelings and opinion of others without which a democratic society cannot function, let alone succeed. When there is true awakening of the people, we shall have the real and conscious public opinion. And justice will reign on earth and truly will the voice of the people be the voice of God.
Which of the following is not the reason for the oppression caused to general public by the running government in the country?
Consider the following statements: 1. The Fiscal Responsibility and Budget Management (FRBM) Review Committee Report has recommended a debt to GDP ratio of 60% for the general (combined) government by 2023, comprising 40% for the Central Government and 20% for the State Governments. 2. The Central Government has domestic liabilities of 21% of GDP as compared to that of 49% of GDP of the State Governments. 3. As per the Constitution of India, it is mandatory for a State to take the Central Government's consent for raising any loan if the former owes any outstanding liabilities to the latter. Which of the statements given above is/are correct?