- Definition: Strategic disinvestment means selling a substantial portion of government shareholding.
- It involves transferring up to 50% or higher percentage to a strategic partner.
- It also includes transferring management control to the strategic partner.
- It is a way of privatization.
- Importance for Fiscal Management:
- Provides additional income to the government.
- Helps in meeting fiscal deficit targets.
- Allows government to spend more on infrastructure and social sectors.
- Reduces the government’s role in businesses where it has no core competence.