UPSC Notes

Disinvestment Policy

PYQs

8

Articles

1

Momentum

21

Phase IFoundation

Background

Overview

Understanding government's fiscal management strategies, economic reforms, and the evolving role of the public sector in the Indian economy. It impacts public finance, capital markets, and industrial policy.

Disinvestment refers to the sale or liquidation of assets by the government, typically shares of Public Sector Undertakings (PSUs). It is a key fiscal policy tool employed to reduce the fiscal deficit, raise resources for social sector spending, and enhance the efficiency and competitiveness of PSUs.

Phase IIStatic core

Facts & tables

Key facts

Key Mechanisms

Offer for Sale (OFS), Initial Public Offerings (IPOs), Follow-on Public Offers (FPOs), Strategic Sale, Exchange Traded Funds (ETFs).

Nodal Agency

Department of Investment and Public Asset Management (DIPAM) under the Ministry of Finance.

Current Fiscal Target (2026-27)

₹80,000 crore (as per article).

Reference table

Static syllabus anchors

TypeReference
Conceptual areaIndian Economy

Reference table

Institutions & roles

BodyRole
Department of Investment and Public Asset Management (DIPAM)Implements
Phase IIIExam lens

Prelims angle

Overview

Prelims angle: Conceptual understanding

Prelims angle: Application of economic principles

Quick revision

  • Sale of government assets (PSU shares).
  • Aims: fiscal deficit reduction, resource generation, efficiency.
  • Methods: OFS, IPO, strategic sale.
  • DIPAM is the nodal agency.
  • Key part of government's fiscal strategy.

High-confidence PYQs

2018Conceptual understanding, Application of economic principles
2013Purpose or function of a policy tool, Conceptual understanding

Topic timeline

Indian Economy
Prelims 2013· Purpose or function of a policy tool, Conceptual understanding
Prelims 2018· Conceptual understanding, Application of economic principles

Govt to sell 5% stake in Cochin Shipyard at ₹1,400/share via OFS

07 Jul 2026 · Government policy of selling PSU stakes to manage finances, fund development, and boost efficiency, primarily managed by DIPAM.

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Practice writing on this topic

UPSC has asked 8 linked questions on Disinvestment Policy in Mains. Write an answer to one — and get it evaluated.