Read the following statements carefully and choose the correct option regarding Assertion (A) and Reason (R). Assertion (A): The disinvestment policy has been widely criticized in India. Reason (R): It resulted in increased market monopoly by public sector undertakings.

Correct — C. Judge A and R separately.

A is true. Disinvestment has been criticised in India. NCERT sets out the critics' case: PSU assets were undervalued and sold to the private sector, and the proceeds went to offset revenue shortfalls instead of developing PSUs or social infrastructure.

R is false. Disinvestment sells government equity, so it reduces state ownership. It points away from public-sector monopoly, not towards it.

A true, R false → option (c).

Why the others are wrong

• (a)
  Both A and R are true and R is the correct explanation of A. — R is false, so it cannot explain A. Disinvestment reduces government ownership of PSUs. The criticism is about undervalued sales and how the proceeds were used, not monopoly.
• (b)
  Both A and R are true but R is not the correct explanation of A. — R is not true. Selling government shares in PSUs moves ownership towards private hands, the opposite of increasing public-sector monopoly.
• (d)
  A is false but R is true. — A is true. NCERT itself sets out the critics' case against disinvestment: PSU assets undervalued when sold, and proceeds used to offset revenue shortfalls.

Disinvestment is the sale of part of the government's equity in public sector enterprises (PSEs) to the public. NCERT treats it as a form of privatisation.

The government's stated aim was to improve financial discipline and facilitate modernisation, bringing private capital and managerial skill into PSU performance.

The critics' case, as NCERT records it, is that assets were undervalued, a substantial loss to the government, and that the proceeds offset revenue shortages rather than building PSEs or social infrastructure.

Key facts

• Disinvestment is the sale of part of the government's equity in public sector enterprises.
• The government's stated aims were financial discipline and modernisation of PSUs.
• Critics' case in NCERT: undervalued PSU assets, and proceeds used to offset revenue shortfalls.
• DIPAM, in the Ministry of Finance, handles the Union government's disinvestment.

Common traps

• Accepting R because it mentions PSUs and sounds critical: check the direction, since disinvestment shrinks state ownership.
• Marking A false because the government promotes the policy: official support and public criticism can both be true.

No directly related past PYQ was found.