Disinvestment occurs when the government chooses to sel l its sta ke in public sector or joint sector
enterprises. This leads to 'privatisation'. Presently, this seems to be the only effective remedy available
with the government to finance the deficit. However, the government should be careful a bout two points:
(i) It should unload s hares of only inefficient enterprises . Otherwise, it would not only be lower ing
its asset holding, but a lso closing a regular source of income, and
(ii) Money received through disinvestment should not be used for purpose of po l itica l popularity
(to garner votes) . Instead, it should be used as productive investment.
