Question

Some scholars refer to disinvestment as the wave of privatisation spreading all over the world to improve the performance of public sector enterprises whereas others call it as outright sale of public property to the vested interests. What do you think?

Answer 1

Disinvestment means the government sells a part of its ownership in a public sector enterprise, while privatisation generally involves transferring greater ownership or control to private hands. It can improve the efficiency and performance of some public enterprises because private participation may bring better management, competition and accountability. However, it should be done carefully. Important enterprises connected with national security, essential services and public welfare should not be privatised only for earning money. Therefore, disinvestment should depend on the performance and importance of each public enterprise.