Disinvestment of Public Sector Units in India

India is plagued by its inefficient and impotent public sector. Barring a very few, 254 Public sector units (PSU) incur heavy losses. However, they continue to exist due to state granted monopoly and excessive assets. Being huge burden on taxpayers, they almost always returned less than investment. In the period of 1986-1991, State owned enterprises made 39% of GDP as gross investment, but generated only 14% of GDP. Conceding to demands of privatisation and with tough resistance from labour unions, government of India is slowly divesting from PSUs. The below table provides the data for divestment which started from 1991(Barring 2 small units CMC Limited and Patherele Concrete).

(Inflation adjusted to 2016 Prices)

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