The Economic Advisory Council to the Prime Minister (PMEAC) in India h

The Economic Advisory Council to the Prime Minister (PMEAC) in India has recommended phased dilution of Government stake in Public Sector Banks from :

74% to 56%

58% to 51%

58% to 49%

51% to 49%

Answer is Right!

Answer is Wrong!

This question was previously asked in

UPSC CAPF – 2014

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Around 2014, the Economic Advisory Council to the Prime Minister (PMEAC) under C. Rangarajan had indeed recommended phased reduction of the government’s stake in Public Sector Banks (PSBs). A key aspect of these recommendations was to eventually bring down the government’s shareholding below the 51% mark to 49%, which would effectively dilute government’s majority control while still maintaining a significant stake. The recommendation was often cited as a move towards greater autonomy for PSBs and better access to capital markets. The specific target range mentioned in various reports of the PMEAC recommendations from that period aligns with bringing the stake down from majority holding (effectively anything above 50%, often cited as minimum 51% for control) to a minority holding of 49%.

PMEAC recommended reducing government stake in PSBs.
The recommendation aimed at diluting government control and increasing autonomy.
The target percentage for dilution was proposed to go below 51%.
A frequently cited figure for the target was 49%.

This recommendation was part of broader suggestions for financial sector reforms aimed at strengthening PSBs, improving their governance, and facilitating their access to capital. Diluting government stake below 51% would technically remove the government’s direct majority control, changing the nature of ownership and governance, although the government would still remain the single largest shareholder.

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