What is the News ?

The government has recently issued a Request for Proposal (RFP) to hire an asset appraiser for the Strategic Disinvestment of IDBI Bank.

Facts About:

Strategic disinvestment involves the sale of a significant portion of the government's ownership in a central public sector enterprise (CPSE), which can be up to 50% or a higher percentage as decided by the competent authority.

• This process also includes the transfer of management control.

It essentially means transferring both ownership and control of a public sector entity to another entity, which can be either private or public.

Distinguishing Strategic Disinvestment/Sale from Disinvestment:

• Disinvestment refers to the sale of minority shares of public enterprises to another entity, whether it's public or private.
• In this case, the government still maintains ownership of the enterprise.

In contrast, strategic disinvestment/sale occurs when the government sells a majority share in an enterprise, relinquishing not only ownership but also control of the entity.

What are the objectives of Strategic Disinvestment:

• Reduce Government Ownership
• Raise Capital
• Enhance Efficiency
• Foster Competition
• Attract Private Investment
• Focus on Core Functions
• Alleviate Fiscal Burden