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New economic policy of 1991
New economic policy of 1991
New economic policy of 1991
New economic policy of 1991
New economic policy of 1991
New economic policy of 1991
New economic policy of 1991
New economic policy of 1991
New economic policy of 1991
New economic policy of 1991
New economic policy of 1991
New economic policy of 1991
New economic policy of 1991
New economic policy of 1991
New economic policy of 1991
New economic policy of 1991
New economic policy of 1991
New economic policy of 1991
New economic policy of 1991
New economic policy of 1991
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New economic policy of 1991

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  • 1. Present byChetan Panara(M00086)Submitted toProf. Kaushal Mandalia
  • 2.  The Indian currency, the rupee, was inconvertible and high tariffs and import licensing prevented foreign goods reaching the market. India also operated a system of central planing for the economy, in which firms required licenses to invest and develop.
  • 3. Why new Economic Policy 1991• Restriction on Private Investment• Socialism• Mixed EconomyInternal debt liability increased to 53% of GDP.
  • 4.  Integration with world economy with. dismantling of tariff wall. Protection of foreign direct investment. upgrading the technology of production. Financial stability. Outward looking policies. Deregulation of domestic market.
  • 5.  Correcting the disequilibrium in foreign exchange market through demand reduction. Reform in trade policy Reduction in fiscal deficit Dismantling of barrier to free flow of capital. Depreciation of exchange rate.
  • 6. Exchange rate.Trade and industrial policy.Policies concerning the public sector.financial sector.Capital market.
  • 7.  Liberalization Privatization Globalization
  • 8.  Amendment in MRTP act. Emphasis to be on controlling and regulating monopolistic, restrictive and unfair trade practices Except the six industries , all other kinds of industrial license have been abolished.
  • 9.  Thrust of policy to be on controlling unfair or restrictive business practices Need for achieving economies of scale for ensuring higher productivity and competitive advantage in the international market, the interference of the government through the MRTP Act has to be restricted
  • 10. • Disinvestment• selling of govt. equity, partially or wholly, to private parties.• Mergers• acquisition
  • 11. • Outsourcing• Reduction in trade barriers.• Free flow of technology• Free movement of labor capital among different countries.
  • 12.  Increase in GDP growth rate Increase in foreign direct investment Increase in foreign exchange Fulfilled a long-felt demand of the corporate sector for declaring in very clear terms that licensing was abolished for all industries except 18 industries which included coal, petroleum, sugar, motor cars, cigarettes, hazardous, chemicals, pharmaceuti cals and some luxury items
  • 13.  Increase in per capita income Increase in foreign trade.(Import,Export,FDI,FII,Merger ) Increase mobility of factor of production Outsourcing
  • 14.  Growing unemployment Neglect of agriculture Growing personal disparities Infrastructural inadequacies Wide spread poverty.
  • 15.  Demonstration effect (luxury goods) Indian small scale industries badly affected Failure of MRTP to break the monopolistic or Oligopolistic character of the Indian market
  • 16. 60 52.4 48.950 40.6 43.9 32.2 28.140 27.2 27.1 27.2 28.030 23.8 20.52010 0 1990-91 1995-96 2000-01 2004-05 Agriculture Industry Services
  • 17. India - One of the fastest growing economies in the world• Average GDP growth (1995 -2005) : 6.2 % per annum• Average annual growth (1995 - 2005) Agriculture & Allied :+ 2.1 % per annum Industry :+ 6.6 % per annum Services : + 7.8 % per annum• Average Per Capita Income growth (1995 - 2005): 3.8 % per annum• Inflation down to a single digit level continuously for the last ten years• Foreign exchange reserves increased from US $ 2 b (March 1991) to US $ 145 b (September 2005)• Merchandise Exports : +20 % average rate of growth in last three years• Booming Services Exports from US $ 4.6 b in 1990-91 to US $ 51.3 b in
  • 18. • Balance of Payments surplus (US $ 26 b in 2004 - 05)• External Debt Service Ratio down from 26.2 % in 1995 to 6.2 % in 2005• Foreign Direct Investment (FDI) : Average +US $ 5 b pa in the last five years.• Foreign Portfolio Investment : US $ 11.4 b in 2003-04 and US $ 8.9 b in 2004-05• Reforms continuing and have unleashed dynamic forces – putting the economy on a trajectory of unparalleled economic growth in the future
  • 19.  India• the world’s most irrigated land mass• world’s 2nd largest exporter of rice & 5th largest exporter of wheat Food production: India’s Ranking in the World  1st Tea, Milk  2nd Rice, wheat, sugar
  • 20. THANK YOU!

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