What are the critical issues that must be addressed before implementing disinvestment policy?
In short
Before disinvestment, the government must settle clear institutional roles, transparent and fair valuation, protection of employees, safeguards against private monopolies, productive use of proceeds and market readiness. Coordination among DIPAM, NITI Aayog and states is needed so that sales support development rather than merely plug fiscal deficits.
Model answer
Ghissu Editorial · Verified 4 Oct 2026 · 277 words
Parliamentary Committee Role
The Standing Committee on Chemicals and Fertilisers3 demands time-bound disinvestment and modernisation of fertiliser PSUs, addressing delays harming Andhra Pradesh’s agrarian economy.
Regulatory Strengthening
Adherence to the Depositories Act (1996) and Kotak Committee (2017) reforms is essential for transparency and investor trust in PSU governance.
Clear Institutional Roles
Defining roles for DIPAM, NITI Aayog, and state bodies like Andhra Pradesh’s Finance Department ensures coordination and effective policy execution.
Employee Welfare and Social Security
Disinvestment must safeguard PSU employees with transition schemes, especially in states like Andhra Pradesh with large PSU workforces.
State-Centre Coordination
Collaboration between the Centre and Andhra Pradesh is vital to align disinvestment with regional development and employment priorities.
Asset Monetisation and Market Readiness
National Monetisation Pipeline 2.0 institutionalises asset sales, including Visakhapatnam port, requiring phased, transparent execution to maintain services and attract investors.
Legal Framework Enhancements
Proposed IBC amendments of 20254, including a creditor-initiated insolvency process and stronger committee of creditors powers, could speed up resolution of stressed assets.
Fiscal Deficit Management
Disinvestment must fit within broader fiscal consolidation, mindful of Andhra Pradesh’s revenue-deficit grant demands under the Finance Commission.
Strategic Use of Proceeds
Channel funds into social infrastructure like the Polavaram irrigation project, supporting inclusive growth in Andhra Pradesh.
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Industrial Development and Policy (India)12 questions
Asked in 5 of 8 sittings since 2008
Most tested: Manufacturing-led industrial policy reform and its policy instruments.
- 2025Discuss the role of the industrial sector in the economic development of India. Discuss the role of the Department of Industrial Policy & Promotion (DIPP).
- 2025Examine the role of the industrial sector in India's economic development. How does industrialisation contribute to income generation, employment, and modernisation of the economy? Support your answer with relevant examples and policy references.
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