Context:

• The disinvestment programme in its current form is not working as desired and thus needs to be reviewed.

Why does the disinvestment plan have to be reviewed?

• Over the years, it has been used as a tool to reduce the fiscal deficit, though the government has often failed to attain the budgeted target. 
• Even in the current fiscal year, the government so far has not raised even half the targeted amount.

Disinvestment plan needs a different approach

• • More of a bottom-up approach is needed instead of a top-down approach.
  • The government must pursue the disinvestment programme to attain broader objectives instead of using it as an instrument for containing the fiscal deficit. 
  • A rolling list of companies to be privatised over a period of time has to be prepared instead of finding companies to divest after having arrived at a target for the year because 
    • It will give the departments concerned much-needed clarity, 
    • It will also allow the markets to prepare for buying shares of such companies.  
  • The disinvestment proceeds can be used to finance important infrastructure projects. 
  • The government can show the fiscal deficit number both with and without disinvestment proceeds.
  • As the proceeds are likely to be volatile, a mechanism can be devised to sustain the flow of investment in identified projects. 
  • Disinvestment can help augment capital expenditure, which would help push up the growth potential of the Indian economy.

• Formulate a clear public-sector policy, which envisages a limited presence of public-sector companies in strategic sectors only. (The government in this regard had done well)