Public Sector

Question 1

What are the 3 kinds of Public Sector?

Answer 1

Departmental Undertakings. Civil Servants run them. Consolidated Fund of India → Annual Budget.

Act of Parliament → IOC, ONGC

Companies Act 2013 - Govt 50% paid up capital

Question 2

What is Public Enterprise Survey?

Answer 2

• It is a survey of CPSE and its subsidiaries. It is kept before parliament during the budget session

Question 3

What is the importance of PSE?

Answer 3

• Provide GnS like rail coal
• Model Employer
• Establish in MP Bihar - reduce regional imbalance
• Non inflationary growth

Question 4

Give examples of companies that were private and later nationalized?

Answer 4

National Textile Corporation

Coal India

Question 5

What were the provisions of New Industrial Policy 1991?

Answer 5

• Dereserved many areas
• Managerial Revamp - greater autonomy
• Refer sick PSU - BIFR

Question 6

Sectors reserved for private sector

Answer 6

Atomic Sector

Question 7

What is the meaning of disinvestment?

Answer 7

• Sale of government shares to retail public, employee, MFs, Domestic FIs, FPIs
• No change in management as government equity 51%

Question 8

What is strategic disinvestment? Give examples

Answer 8

• When sell major chuck 26% / 51 % to single buyer or hand over management
• IPCL → Reliance. BALCO → Sterlite

Question 9

What is strategic sale?

Answer 9

• when sell to PSB

- HPCL → ONGC. IDBI → LIC. PFC → REC

Question 10

Which are strategic enterprises?

Answer 10

• Railway
• Atomic energy
• Arms and Ammunitions

Question 11

What is the meaning of Buyback shares?

Answer 11

• Company buy own share from existing shareholders at price more than market price
• Reduces number of shares outstanding

Question 12

What is Cross-Holding

Answer 12

• State owed companies like coal india having significant cash buy shares of one another

Question 13

PSE - ETF

Answer 13

• 2014. Shares of 10 PSUs - sold to Private fund manager → that is listed on Stock Exchange.
• Unit of Funds issued for public. Buyer of a unit get shares of all ten together
• advantage - all 10PSU valuation reflection therefore seen as lesser risk
• ETF is a mutual fund

Question 14

What is Bharat 22

Answer 14

• 22 shares of CPSE, PSU and Private enterprises of SUUTI across sectors like Basic material, energy, finance, FMCG, industries, utilities. In 2017

Question 15

What is SUUTI?

Answer 15

• It is a UTI MF carved out of UTI
• It is SEBI registered MFI
• UTI act 1963 repealed → bifurcaed into - SUUTI and UTI-MF.
• SUUTI - 51 comp public / govt share
• UTI-MF - promoted by SBI LIC BoB PNB

Question 16

Government shares in which - significantly

Answer 16

• Axis
• LnT
• ITC

Question 17

Name some methods of disinvestment

Answer 17

• IPO
• FPO
• CPSE-ETF
• offer for sale of shares - by promoter thru stock exchange, to institutional investors by auction. extensively used since 2012
• Strategic sale
• crossholding

Question 18

What is DIPAM

Answer 18

• Dept of Disinvestment 1999 → Ministry of Disinvestment 2001 → Do Disinvestment under Mo Finance in 2004 → Do Disinvestment to DIPAM in 2016
• Management of central govt investments in equity
• Decision on recommendations of NITI, Adm minister, for disinvestments

Question 19

Maharatnas?

Answer 19

• Navratna
• Indian SE
• average Turn over for 3 years around 25k crore
• Average net turnover 15k crore
• average net profit after tax 5k crore
• significance global presence
• Ex. BHEL CIL GAIL IOC NTPC ONGC SAIL BPCL

Question 20

Navratna?

Answer 20

• Autonomy in expenditure
• subsidiaries, Joint venture, tech, strategic alliance
• capital market fund - international + domestic
• managerial autonomy
• seventeen