Divestment

"The process by which the government or a company sells off assets, subsidiaries, or shareholdings"

Definition

The process by which the government or a company sells off assets, subsidiaries, or shareholdings

⭐ Significance for UPSC

Distinction: Disinvestment (India's official term) = government selling shares in PSUs, retaining majority; Divestment = full or majority offloading; Privatisation = transfer of management control. UPSC Prelims regularly asks about DIPAM (Dept. of Investment and Public Asset Management) and PSU disinvestment targets. Key in GS-3 (economy, PSU reform).

Example / Context

India's divestment target of ₹50,000 crore for 2024-25 included strategic divestment of IDBI Bank, where the government planned to reduce its stake below 26%.

Mains GS Relevance

GS Paper 3

Economy, Environment, S&T, Security

Subject