- Disinvestment was a critical element in structural adjustment programs.
- Government initiated a limited process of selling its ownership/equity in PSUs.
- The government generally retained 51% of equity and management control.
- This signaled that PSUs must finance investment from internal resources or capital markets.
- It encouraged efficiency and commercial orientation in public sector companies.
- Budgetary support to loss-making PSUs was phased out.
- This was a step towards transferring business from public to private ownership.