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What is the primary objective of the Memorandum of Understanding (MoU) system in privatisation?

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Question

What is the primary objective of the Memorandum of Understanding (MoU) system in privatisation?

Options

  • To immediately sell all PSUs to private investors

  • PSUs are evaluated on performance targets

  • To provide unlimited financial autonomy without accountability

  • To completely eliminate government oversight

MCQ
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Solution

The MoU system is a form of privatisation measure where PSUs are evaluated based on predetermined performance targets. This mechanism introduces performance-based accountability while potentially maintaining government ownership.

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