(i) “Indian economy has hugely benefitted by the disinvestment policy adopted by the Government of India in the post 1991 period.” Defend or refute the given statement with valid arguments. (ii) Distinguish between Tariffs and Quotas. (i) Discuss briefly the financial sector reforms undertaken by the Government of India in the post 1991 period. (ii) Distinguish between Multilateral Trade and Bilateral Trade.

Question

Accepted Answer

(i) **I defend the statement** that Indian economy benefitted from disinvestment policy. Arguments:

**In Favour:**
- Improved financial discipline in PSUs
- Facilitated modernisation
- Brought in private capital and managerial capabilities
- Generated revenue for government
- Created competitive environment

**Against:**
- Assets of PSEs were undervalued and sold cheaply
- Proceeds used to compensate revenue shortage instead of development
- Some strategic assets lost to private sector
- Employment concerns in disinvested units

(ii) **Disinvestment Methods:**
- Transfer of ownership and management to private sector
- Selling part of equity of PSUs to public
- Granting Navratna/Miniratna status for better performance