For the past four decades after independence the country was pursuing a path of development in which the public sector was expected to be the engine of growth ,However the public sector overgrew itself and its shortcomings started manifesting in low capacity ,utilization and low efficiency due to over manning ,low work ethics ,over capitalization due to substantial ,time and cost over runs, inability to innovate ,take quick and timely decisions ,large interference in decision making process etc. Hence a decision was taken in 1991 to follow the path of disinvestment. The change process in India took place in India in the year 1991-92 ,with 31 selected PSUs disinvestment for Rs 3,038 crore.In August 1996 the disinvestment commission chaired by G.V.Ramakrishnan was set up to advice , super advice, monitor and publicize gradual disinvestment of Indian PSUs. while launching the new economic policy the government had appointed the Krishnamurthy committee in 1991 and Rangarajan committee in 1992.The objectives of both these committees were to fulfill the objectives of modernization of the public sector through strengthening R&D initiating diversification /expansion program me, retaining & re- employment of employee ,widening the capital market basics and mitigating fiscal deficit of the government. These committees actually distinguished between long term and short term goals .of disinvestment and advised the government not to sacrifise the long term goals for the sake of fulfilling short term objectives.