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Liberalization 100216050452 Phpapp02
Liberalization 100216050452 Phpapp02
Liberalization 100216050452 Phpapp02
INTRODUCTION
Liberalization of the economy means to free it from direct or physical controls imposed by the government.
Economic reforms were based on the assumption that market forces could guide the economy in a more effective manner than government control. Examples of one of other undeveloped countries like Korea, Thailand, Singapore, etc. that had achieved rapid economic development as a result of liberalization were kept in consideration.
COMPONENTS OF LIBERALIZATION
1. Industrial Liberalization
Industrial Sector was among the first sectors to be liberalized in India in a series of measures. Industrial licensing has been abolished except in a small number of sectors where it has been retained on strategic considerations. Abolition of industrial licensing Reduction in d reservation of public sector
Facilitated easy access to foreign technology Restriction were removed on expansion and, Opening the economy to FDI.
2. Trade Liberalization
Trade policy allowing domestic providers (of goods and/or services) to compete more freely in world markets and foreign providers to compete more freely in domestic markets.
TRADE SECTOR REFORMS
3. Financial Liberalization
Financial liberalization (FL) refers to the deregulation of domestic financial markets and the liberalization of the capital account. In one view, it strengthens financial development and contributes to higher long-run growth. In another view, it induces excessive risk-taking, increases macroeconomic volatility and leads to more frequent crises.
REFORMS IN INSURANCE
In the first five year plan, India had attained an average annual growth rate by 3.5%.
Indian economy showed an average growth rate of 6.4%, which was 5.9% in the 80's. At the end of the 8th Five Year Plan, the annual growth rate of India reached 6.9 percent. During the period from 1991-92 the Indian economy passed through a tough time. The overall economic growth in this period declined to 1.1% and the total fiscal deficit became 8% of the GDP.
50
2.2
0 1990-91
15,872
5,138 103
1990-91 1994-95
5,385
6,789
8,152 5,639
1997-98
2000-01
2001-02
2002-03
2003-04
in per cent
120 100 80 60 40 20 0
150 110
50
1991 Mar-92 Mar-95
42
Mar-97
38.5
Mar-00
30
Mar-02
25
Mar-03
20
w.e.f March 2004
Challenges Ahead
1. Governance Need for elimination of large number of Rules & Regulations in the books Sharply reducing the number of implementing agencies Moving towards single window clearance
2.
CONCLUSION
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