Scribd
Upload
54 views19 pages

Economics Chapter 11

Uploaded by

devika.rathod1010
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as KEY, PDF, TXT or read online on Scribd
54 views19 pages

Economics Chapter 11

Uploaded by

devika.rathod1010
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as KEY, PDF, TXT or read online on Scribd
You are on page 1/ 19

STRUCTURAL CHANGES IN THE INDIAN ECONOMY

AFTER LIBERALISATION
ISC 11th Economics -Purvi Parsana
INTRODUCTION
INDIAN ECONOMY-A
DEVELOPING ECONOMY
INDIAN ECONOMY-A MIXED
ECONOMY
NEED FOR ECONOMIC REFORMS

Weakness of the Pre-1991 Policies

Major Foreign Exchange Crisis

Conditionalities Imposed by IMF and World Bank

Fall of USSR
POLICY OF LIBERALISATION OF
INDIAN ECONOMY
Liberalisation
FEATURES OF THE POLICY OF
LIBERALISATION
Delicensing

Relaxation in controlling monopolies

Liberalisation of Industrial location policy

Removal of restrictions or Mergers

Liberalisation of Capital market

Foreign exchange market reforms

Foreign trade reforms

Development of infrastructure

Ease of doing business

Banking reforms
SIGNIFICANCE OF LIBERALISATION POLICY

Overcome the problems of ‘control raj’

Freedom to entrepreneurs

Injected a spirit of competition in the economic system


and has encouraged the entrepreneurs to undertake
investment. Increased efficiency in the economy
POLICY OF PRIVATISATION
MEANING AND RATIONALE
Privatisation basically implies the process which leads to transfer of
ownership of public sector enterprises from the government to the
private sector.
ARGUMENTS FOR PRIVATISATION
Ideological ground

Improvement in managerial efficiency

Creation of competitive environment

Profit-oriented decisions

Greater flexibility in decision-making

Reduction in burden on public exchequer

Greater attention to consumers’ satisfaction

Greater investment and employment opportunities

Revival of sick units

Increase in accountability

Increase in financial discipline


ARGUMENTS AGAINST PRIVATISATION

Privatisation not always desirable

Social welfare neglected

Possibility of unemployment

Growth of private monopoly

Possibility of corrupt practices

Lopsided Industrial development


PRIVATISATION IN INDIA
Policy of dereservation, i.e., reducing the number of industries reserved for the
public sector

Revival of the sick public sector enterprises

Providing financial and managerial autonomy to Navaratnas and Miniratnas

MOU with the public sector enterprises to grant them autonomy and increasing the
quality of accountability

Voluntary retirement scheme for the employees of public sector enterprises

Policy of disinvestment, i.e., selling off equities of the public sector enterprises to
private investors, financial institutions, and public at large
POLICY OF GLOBALISATION
It is a process of integrating the economy of the country with other
economies of the world through trade, Capital flow, and technology.
EFFECTS OF GLOBALISATION
Increased flow of goods between countries

Increased international flow of capital

Increase in interdependence between countries

Greater access to the advanced technologies

Emergence of worldwide market

Increased information flow between different countries

Increased prosperity in the developing countries

Increase in the cross-cultural contacts

Danger of the economies becoming vulnerable to economic fluctuations abroad

New challenges like inter-country inequalities, environmental degradation, etc.


GLOBALISATION OF INDIAN ECONOMY

Features:

Exchange rate reforms

Liberalisation of imports

Opening up to foreign investment

Free flow of foreign technology


Effects:

Inflow of multinational corporations

Emergence of IT and BPO sectors

Availability of advanced technology

Increased job availability for the skilled manpower

Setting up of special economic zones (SEZs)

Indian corporate sector emerging as a global player

Increased competition from the foreign companies

Loss of jobs in some cases

Foreign direct investment used for takeovers and speculative investment


CHANGES IN THE INDIAN ECONOMY AFTER
1991
Acceleration in economic growth

Increase in growth rate of Industrial sector

Change in the composition of national income

Increase in the rate of saving and investment

Increased importance of foreign trade

Increase in the foreign exchange reserves

Flow of foreign direct investment

Overseas investment by Indian companies

Decreased importance of the public sector


“Type
“Thank
a quote
You!”
here.”

–Johnny
–Purvi Appleseed
Parsana

You might also like