In the words of a layman, the term investment can be used to denote conversion of money or cash into securities, debentures, bonds, etc. or buying or construction of assets or subsidiaries. Disinvestment or Divesture is just the opposite of the concept mentioned above and is the subject matter of this research. To be more specific, this research paper deals with the selling or liquidating of an asset or affiliate by the Government only. The Government is forced to take such decisions when it gets an indication that the public sector undertakings are having a negative rate of return on capital employed. Such situations arise when the PSUs turn into a liability for the Government rather than an asset. This research paper delves into the various aspects involved in the disinvestment of public sector undertakings and tries to find out the actual effect of such disinvestment. It tries to trace the future of such undertakings after the disinvestment process with the help of two very important case studies. After going through the research paper, one will be able to conclude whether disinvestment of PSUs is a boost for the Indian economic system or does it hamper the growth of the country economically.