Economic reforms india ppt

economic reforms since 1991 ppt and personnel management and economic reforms ppt
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Published Date:25-07-2017
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CPT Section C General Economics Chapter 7 Unit 1 Dr C.Anirvinna • Reasons for Economic Reform in India 1 • Reforms in Major Sectors – Industrial, Financial, External, Fiscal Policy 2 • Impact of Economic Reforms on India 3 An Intro. After Independence Fiscal Policy was Framed • India followed the policy of • Private sector to finance planned growth development programme • It pursued conservative policies • Public investment in infrastructure • The public sector was given dominant position Monetary Policy Foreign Trade Policy • Regulates financial flows • To protect domestic industry • To keep the inflation under control • To keep trade balance in manageable limits. An Intro. Excess of consumption and expenditure Growing inefficiency in the use of resources Over protection to industry Mismanagement of firms and the economy Mounting losses of public sector enterprises Various Distortions • Poor Technological Development • Shortage of Foreign Exchanges • Imprudent Borrowings from Abroad • Mismanagement of Foreign Exchange Reserves Low Foreign Exchange Reserves Burden of National Debt Inflation Industrial Sector Financial Sector External Sector Fiscal Policy An Intro. Industrial licensing • It was abolished for all projects except for 18 industries 18 Industries Include • Strategic and Security Concerns • Hazardous Chemicals and Over-riding Environmental Reasons • Items of Elitist Consumption At present there Only 8 industries are only 3 groups where industries which At present 6 security and are reserved for industries are strategic concerns the public sector under the purview were predominant of industrial • Atomic energy were exclusively • Substances specified licensing. for the public in the schedule sector • Rail transport Foreign exchange availability is ensured through foreign equity The total value of plant and machinery up to maximum of Rs. 2 crore The mandatory convertibility clause would no longer be applicable for terms loans The system of phased manufacturing programmes approved on case by case The Non-Polluting Industries can be located outside 25 km. of cities Existing units would be provided a new broad banding facility The exemption from licensing would apply to all subsequent expansion of existing units All existing schemes would be abolished Foreign investment in high priority industries Technology and direct investment up to 51% in foreign equity industries Government would provide automatic approval for high priority industries with specified parameters Companies with more than defined investment were required to take prior approval of central government Establishment of new undertakings Expansion of existing undertakings Merger & amalgamation. Constraints were The above said removed on growth requirement was and restructuring of abolished large business house Banking Capital Insurance Administered interest rate structure Quantitative restrictions on credit flows High reserve requirement under CRR Keeping significant proportion of lendable resources CRR was gradually lowered from its peak SLR was reduced from its peak to 23% in recent years PLR rates of banks set free from RBI Bank rate has been reduced from 8% to 6% effective from April 2003

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