6. Impact of Disinvestment on Financial Performance of PSEs

The objective of this chapter is to assess and compare the financial performance of disinvested and non-disinvested central public sector enterprises (PSEs) based on 19 financial ratios (pertaining to the profitability, efficiency, leverage, liquidity, and productivity per manpower) over a period of 20 years (1991–1992 to 2010–2011). The findings indicate that the profitability in most of the parameters of disinvested PSEs is several times higher compared to non-disinvested PSEs in the major time span covered by the study. Similarly, better assets turnover, productivity of capital, and liquidity position have been observed in disinvested PSEs vis-à-vis non-disinvested PSEs. Further, no major impact of recession has been observed in both types of PSEs.