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India's privatisation plan

When was the ministry of divestment formed in India?
Take the Rediff Biz Quiz and find out how much you know about India and its privatisation programme.

1. When was the ministry of divestment formed in India?
a) 1991
b) 1996
c) 1999

2. Which was the first successful divestment of a PSU carried out by the ruling NDA combine?
a) Modern Foods
b) Lagan Jute Machinery Company Ltd
c) Balco

Wrong! Try again..
Wrong!
The correct answer is Lagan Jute Machinery Company Ltd.
Lagan Jute Machinery Company Ltd was the first case of successful privatisation of a central public sector undertaking, carried out by the government. LJMC is a Kolkata-based company and manufactures jute machinery mainly spinning and drawing frames. It employed around 400 employees prior to privatisation and started making losses. It was approved for privatisation in the year 1997, through sale of 74% stake to a strategic partner and was finally divested in 2000.
Correct!
Lagan Jute Machinery Company Ltd was the first case of successful privatisation of a central public sector undertaking, carried out by the government. LJMC is a Kolkata-based company and manufactures jute machinery mainly spinning and drawing frames. It employed around 400 employees prior to privatisation and started making losses. It was approved for privatisation in the year 1997, through sale of 74% stake to a strategic partner and was finally divested in 2000.

3. Who were the final three bidders for Balco when it was being privatised?
a) Sterlite, Hindalco, Alcoa
b) Sterlite, Indalco, Alcoa
c) Sterlite, Hindalco, Indal

Wrong! Try again..
Wrong! The correct answer is Sterlite, Hindalco, Alcoa.
A 51% stake in Bharat Aluminium Corporation Limited was finally sold to Sterlite Industries for Rs 551.5 crore. Hindalco and Alcoa of the US were the other two short-listed bidders for the company which has over 7,000 employees and became the first case of a big ticket PSU divestment in India.
Correct!
A 51% stake in Bharat Aluminium Corporation Limited was finally sold to Sterlite Industries for Rs 551.5 crore. Hindalco and Alcoa of the US were the other two short-listed bidders for the company which has over 7,000 employees and became the first case of a big ticket PSU divestment in India.

4. Who was the first minister for divestment under the current NDA government?
a) Arun Jaitley
b) Arun Shourie
c) Atal Bihari Vajpayee

Wrong! Try again..
Wrong! The correct answer is Arun Jaitley.
When the Department of Divestment was formed in 1999, Arun Jaitley was given charge of it. Under Jaitley, two companies, Lagan Jute Machinery and Modern Foods (which was bought over by Hindustan Lever Ltd) were privatised.
Correct!
When the Department of Divestment was formed in 1999, Arun Jaitley was given charge of it. Under Jaitley, two companies, Lagan Jute Machinery and Modern Foods (which was bought over by Hindustan Lever Ltd) were privatised.

5. Under which Indian prime minister were guidelines for the divestment process first laid down?
a) Rajiv Gandhi
b) Chandra Shekhar
c) P V Narasimha Rao

Wrong! Try again..
Wrong! The correct answer is Chandra Shekhar.
In the interim budget of 1991-92 laid out under the Chandra Shekhar government, the idea of divestment was first talked about. The policy, as enunciated by the government, then was to divest up to 20 percent of the government equity in selected public sector enterprises in favour of public sector institutional investors. The objective of the policy was stated to be to broad-base equity, improve management, enhance availability of resources for these units and yield resources for the exchequer.
Correct!
In the interim budget of 1991-92 laid out under the Chandra Shekhar government, the idea of divestment was first talked about. The policy, as enunciated by the government, then was to divest up to 20 percent of the government equity in selected public sector enterprises in favour of public sector institutional investors. The objective of the policy was stated to be to broad-base equity, improve management, enhance availability of resources for these units and yield resources for the exchequer.

Also Read:
The Divestment Development: Complete Coverage

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Compiled by: Priya Ganapati



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