Disinvestment is the action of an organization or government of selling or liquidating an asset or subsidiary.

Evolution Of Disinvestment Policy:
It has been decided that Government would disinvest up to 20 per cent of its equity in selected public sector undertakings, in favour of mutual funds and financial or investment institutions in the public sector.

The disinvestment, which would broad base the equity, improve management and enhance the availability of resources for these enterprises, is also expected to yield Rs. 2,500 crores to the exchequer in 1991-92.

The modalities and details of implementing this decision, which are being worked out, would be announced separately. The policy, as enunciated by the Government, under the Prime Minister Shri Chandrashekhar was to divest up to 20% of the Government equity in selected PSEs in favour of public sector institutional investors.

The objective of the policy was stated to be to broad-base equity, improve management, and enhance availability of resources for these PSEs and yield resources for the exchequer.

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