FM: Growth remains priority, PSU divestment considered post-budget
Finance Minister emphasizes growth as priority, considering further PSU divestment after budget presentation.
Photo by Markus Spiske
The Finance Minister (FM) stated that growth remains a priority and the government is considering further Public Sector Undertaking (PSU) divestment following the budget presentation. This indicates the government's continued focus on economic expansion.
The FM's statement suggests that PSU divestment is being viewed as a means to generate revenue and boost economic growth. This policy direction is relevant for understanding the government's fiscal strategy and its approach to managing public sector assets.
Key Facts
Growth remains priority
PSU divestment considered
UPSC Exam Angles
GS Paper 3 (Economy): Government Budgeting, Public Sector
Connects to syllabus topics like disinvestment, fiscal policy, economic growth
Potential question types: Statement-based, analytical
Visual Insights
Key Economic Indicators
Dashboard highlighting key economic indicators mentioned in the news, focusing on growth and PSU divestment.
- GDP Growth Rate (FY25 Projected)
- 7%
- Divestment Target (FY25)
- ₹50,000 crore
Indicates the pace of economic expansion. Higher growth is crucial for job creation and poverty reduction. Important for understanding the overall health of the Indian economy.
Shows the government's commitment to raising revenue through PSU divestment. Impacts fiscal deficit and government spending on social programs.
More Information
Background
Latest Developments
The government has been actively pursuing PSU divestment as a means to generate revenue and boost economic growth. Recent examples include the strategic sale of Air India and the initial public offering (IPO) of LIC. These divestments have been aimed at improving the efficiency of these entities and unlocking their value.
However, PSU divestment has also faced criticism and challenges. Concerns have been raised about the valuation of assets, the impact on employees, and the potential for monopolies. Trade unions and opposition parties have often opposed divestment plans, citing concerns about job losses and the loss of public control over key industries.
The future outlook for PSU divestment remains uncertain. The government is likely to continue pursuing divestment as part of its economic reform agenda. However, it will need to address the concerns of various stakeholders and ensure that divestments are carried out in a transparent and efficient manner. The success of future divestments will depend on various factors, including market conditions, investor sentiment, and the government's ability to manage the process effectively.
Frequently Asked Questions
1. What is PSU divestment and why is the government considering it?
PSU divestment refers to the government selling its stake in Public Sector Undertakings (PSUs). The government is considering it to generate revenue and boost economic growth, as stated by the Finance Minister.
2. According to the Finance Minister, what is the government's main priority?
According to the Finance Minister, the government's main priority is economic growth.
3. What are some recent examples of PSU divestment?
Recent examples of PSU divestment include the strategic sale of Air India and the initial public offering (IPO) of LIC.
4. What are the potential benefits and drawbacks of PSU divestment?
PSU divestment can generate revenue and improve efficiency, but it can also raise concerns about job losses and the potential loss of control over key sectors. As per the topic data, divestment has faced criticism and challenges.
5. What is the historical background of PSUs in India?
PSUs in India have their roots in the post-independence era, with the Industrial Policy Resolution of 1956 emphasizing the role of the state in driving economic growth and establishing a socialist pattern of society.
6. How might the government's focus on growth and PSU divestment impact common citizens?
If successful, the focus on growth and PSU divestment could lead to increased economic activity and job creation. However, there are also concerns about potential job losses and the impact on social welfare programs.
7. What is the significance of the Finance Minister's statement regarding PSU divestment?
The Finance Minister's statement indicates the government's continued focus on economic expansion and its view of PSU divestment as a means to generate revenue and boost economic growth.
8. What are the key facts to remember about PSU divestment for the UPSC Prelims exam?
For the UPSC Prelims exam, remember that the government views PSU divestment as a means to generate revenue and boost economic growth. Also, be aware of recent examples like Air India and LIC.
9. What are some potential reforms related to PSU divestment that could be considered?
Potential reforms could focus on ensuring transparency and accountability in the divestment process, protecting the interests of employees, and using the proceeds from divestment to invest in social and infrastructure development.
10. What does the phrase 'growth remains priority' mean in the context of the Finance Minister's statement?
It means that the government is prioritizing policies and initiatives aimed at stimulating economic expansion, even as it considers measures like PSU divestment.
Practice Questions (MCQs)
1. Consider the following statements regarding Public Sector Undertakings (PSUs) in India: 1. The Industrial Policy Resolution of 1956 emphasized the role of the state in driving economic growth through PSUs. 2. The New Economic Policy of 1991 marked a shift towards liberalization, influencing PSU divestment. 3. The Department of Economic Affairs (DEA) is primarily responsible for formulating and implementing the government's divestment policy. Which of the statements given above is/are correct?
- A.1 and 2 only
- B.2 and 3 only
- C.1 and 3 only
- D.1, 2 and 3
Show Answer
Answer: A
Statement 1 is CORRECT: The Industrial Policy Resolution of 1956 indeed emphasized the role of the state in driving economic growth through PSUs. Statement 2 is CORRECT: The New Economic Policy of 1991 brought liberalization, which influenced PSU divestment. Statement 3 is INCORRECT: The Department of Investment and Public Asset Management (DIPAM), not DEA, is primarily responsible for formulating and implementing the government's divestment policy.
2. Which of the following is NOT a stated objective of Public Sector Undertaking (PSU) divestment in India?
- A.To generate revenue for the government
- B.To improve the efficiency of PSUs
- C.To promote monopolies in key sectors
- D.To unlock the value of PSUs
Show Answer
Answer: C
The objectives of PSU divestment include generating revenue for the government, improving the efficiency of PSUs, and unlocking their value. Promoting monopolies is NOT an objective; in fact, divestment aims to increase competition and efficiency.