What is Divestment or disinvestment

Divestment or disinvestment means selling a stake in a company, subsidiary or other investments. Businesses and governments resort to divestment generally as a way to pare losses from a non-performing asset, exit a particular industry, or raise money. 

 

Governments often sell stakes in public sector companies to raise revenues. In recent times, the central government has used this route to exit loss-making ventures and increase non-tax revenues. 

 

The Indian government started divesting its stake in public-sector companies in the wake of a change of stance in economic policy in the early 1990s — commonly known as 'Liberalisation, Privatisation, Globalisation'. This has helped