Q. Consider the following statements:

1. The disinvestment process was first started in the beginning of 11th Five Year Plan (FYP).
2. A substantial portion of proceeds of disinvestments is used for the development of PSEs and building social infrastructure in the country.

Which of the above is / are correct?
Answer: None of the above
Notes: Neither of the statement is correct. Disinvestment was started following the economic reforms in 1991-92. Every year, the government fixes a target for disinvestment of PSEs. For instance, in 1991-92, it was targeted to mobilise Rs. 2500 crore through disinvestment. The second statement is also incorrect. One of the biggest allegations against the disinvestment policy is that the proceeds from disinvestment were used to offset the shortage of government revenues rather than using it for the development of PSEs and building social infrastructure in the country.