Disinvestment and selling off a company is not the same thing.We must have heard of word 'Disinvestment' in news or newspaper and a lot of uproar over it too. The term 'Disinvestment' means to liquidate assets or reduce capital expenditure in order to make maximum utilisation of resources and improve return on investment.
On the other hand selling off a company means to give up the equity or ownership to another person or company and completely cease to exist. Selling a company is done ether to earn a profit or to recover the money invested and the sale can be at loss too.
There are huge uproar about disinvestment and news that Government is selling off the public companies and making them private. This way people will lose job and everything will become expensive and there will be no security of job for people working in public sector also.
I think public sector job is also a job where one has to perform and earn his living. Public companies are not a place where you get a job and then you become lethargic and idler. But in general the work culture and productivity of PSUs where the capital investment is huge but the output or return on investment is negative figures the owner or Government with maximum stake has no option but to shed off the load and improve its productivity.
For the same reason every year the Government has target of disinvestment that runs into trillions of rupees. Government companies are there to provide employment but at the same time they are also bound to earn and get return on the investment made and for that the human capital needs to perform to their best capacity, which is lacking. In th ener Government company also does business although the cost of goods or services is low but still the scale of economy can make up for the low cost. They also need to earn a percentage of profit to justify the investment.
Any business which operates to earn profit will surely reduce its capital expenditure or sell of some of its assets which are not performing well to improve its return on investment. Anyways private business first start with reducing the human capital first and other assets later.
What meaning members have about disinvestment?