License Permit Raj - Unitedworld School of Business

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License Permit Raj - Unitedworld School of Business

  1. 1. THE LICENCE-PERMITRAJ1947 - 1990
  2. 2.  A term used to describe regulation of the private sector inIndia between 1947 and the early 1990s. One needed the approval of numerous agencies in orderto set up a business legally. Result of a mixed economy that used a govt. planningcommission established after independence. The license raj was largely successful in the 1950s andafter, but eventually lead to low rates of growth andinvestment. India began to liberalize its economy in the 1980s endingthe license raj.
  3. 3. Scenario Political relations played as aneffective factor in expansion More Expansion in abroad ascompared to India Growing governmental intervention inthe economy
  4. 4. Low enterprise creation New enterprises founded duringLicense-Permit Raj Much fewer enterprise were launchedthan Nehru era. Example- Nirma Group, HindujaBrothers
  5. 5. Structural-Strategic Postures Lack of significant development instructure and strategy Business leaders were depended moreon intuition and gut feeling thanknowledge based understanding of thesituation Invested more in foreign collaborationthan R&D and quality
  6. 6. The FERA, 1973 Intended to restrict the inflow of foreign capital intothe country MNCs were required to dilute their holdings to 40%in their Indian subsidiaries
  7. 7. Public sector Huge increase in PSU than Nehru era. Further expansion in acquiring private firms. Lack of requisite autonomy and constantinterference by the Ministries. Limited success. Creating employment opportunities for thesectors neglected by private firms. Leads to losing the elan of License-Permit raj.
  8. 8. Video The License-Permit Raj
  9. 9. Thank you

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