Financial Impact of Disinvestment Practices on Employment Of selected Public sector enterprises in India

Abstract

Disinvestment is considering a process in which the government of the country sells a part of the equity shareholding of the public sector enterprises to the private sector. Disinvestment is considered to be a strategy for the Indian government to improve the production capability and profitability of public sector enterprises and also raise funds to mitigate its fiscal deficits. In my research work the universe is finite i.e. public sector enterprises. A sample of 10 enterprises has been selected for the purpose of the study.  Sample constitutes 10 PSEs in which disinvestment have taken place in the years 2009-10 and 2010-11. The size of disinvestment in case of sample enterprises has ranged between 1% and 10%. The objective of the present study is to find out the financial implications of disinvestment given by two ratios (net sales per employee (NSPE) and net profit per employee (NPPE) in terms of employment of public sector units of India. The statistical tools namely, measures of central tendency and variation and Student‘t’ test were applied for analysis and interpretation of data. The statistics namely‘t’ statistics are used for testing the significant differences in the pre and post disinvestment periods. The null hypothesis (H0) assumes that there is no significant difference between two values. It is rejected/ accepted depending upon the table value and calculated value‘t’ statistics.  In this study pre disinvestment mean value of financial years (2004-05 to 2008-09) are compared with post disinvestment mean value of financial years (2011-12 to 2015-16). Findings suggest that NSPE and NPPE have shown significant increase in 8 public sector enterprises out of 10 public sector enterprises.