Liberalization of indian economics


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A view on Indian Construction Industry before and after liberalization.

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Liberalization of indian economics

  1. 1. Liberalization of Indian Economics: A Study on Construction Industry
  2. 2. Contents › Introduction › Objectives of the project › Methodology › Hypothesis of Research › Primary Data - Samples › Questions - Primary data › Secondary Data – Samples › Comparison - Primary Data Example › Comparison – Secondary Data Example › Results › Drawbacks of Liberalization › Conclusion › References
  3. 3. Introduction Pre – Liberalization era › Before liberalization India had no access to funds and technology which effected the infrastructure negatively suppressing the growth of construction industries. › There were many barricades which hampered the growth of the Construction Industry some them are taxation structure license raj etc.
  4. 4. Post – Liberalization era There were many changes that happened after the liberalization of Indian economy in 1991. To study the impact of liberalization on Construction Industry, the post liberalization era has been categorized into 5 sections. I. Characteristics of Market II. Access to Financial resources III. Access to Technology IV. Market Presence V. Import license and Export License
  5. 5. Objectives of the project › Objective of the project is to study the effect of Labialization on Indian construction sector and to compare its accountability in pre 1990-91 to post 1991.. › To study the transformation of unorganized industries into strong competitive organized industries in India which was mainly fueled Indian Construction sector and related market. › The main objective of this study is to compare and analyze the markets trends and reforms brought in with Liberalization.
  6. 6. Methodology
  7. 7. › Method of collection – Primary Data : Delphi Method – Secondary Data : Construction sector publications. › Sample size – Primary Data – 10 No – Secondary Data – 20 No › Assumption – Respondent's data were treated as tangiable.
  8. 8. Hypothesis of Research › The study is basically carried out to explain the pre-liberalization and post liberalization era in construction sector. › Null Hypothesis can be explained as, “There is no significant changes in the construction sector after Liberalization in India”.
  9. 9. Primary Data - Samples The Primary Data consists of expert opinion from the construction sector where as the Secondary data comprises primarily the study of publications by various construction related organisations and common groups of experts in the field. Primary data Samples : 1. B. M. Bansal - Former Chairman of Indian Oil Corporation limited . 2. Sudhir Vasudeva - Chairman and Managing Director of ONGC. 3. Arup Roy Choudhury - Chairman and Managing Director of NTPC. 4. Chandra Shekar Verma - CEO of Steel Authority of India 5. R. P. Singh - Chairman of National Highways Authority of India (NHAI) 6. Ajit Gulabchand - Chairman and Managing Director of Hindustan Construction Company 7. R.P Tak - Chairman-cum-Managing Director of Cement Corporation of India 8. Hemant M. Nerurkar - CEO of TATA Steel 9. Mohandas Saini - CEO of the Construction Division of Shapoorji Pallonji & Co. Ltd. 10. A. M. NAIK - Managing Director and CEO of L&T.
  10. 10. Questions formed for the project for the collection of data from Primary data 1. What was the characteristics of construction industry before economic liberalization in 1991? 2. What was the characteristics of construction industry after economic liberalization in 1991? 3. How do you explain the impact of liberalization of Indian economy on Construction Industry? 4. What are the most notable changes that took place after the liberalization of Indian economy? 5. Which fields in Construction Industry have changed after liberalization of Indian economy?
  11. 11. 6. What is the impact of liberalization on the employment in Construction Industry? 7. What is the impact of liberalization on construction technology? 8. What is the impact of liberalization on Imports and exports? 9. How does the liberalization helps in the progress of Construction Industry? 10. Do you think there is a development in Construction Industry after Liberalization of Indian economy?
  12. 12. Secondary Data – Samples This comprises primarily the study of publications by various construction related organisations and common groups of experts in the field. This consists of the companies statistics from the preliberalization to post liberalization era. The statistics are also collected by some key consultancies in construction sector. To study this we have kept the sample size for this to be 20. 1. Indian Oil Corporation Limited 11. Madras Cements 2. Hindustan Petroleum Corporation Limited 12. National Highways Authority of India 3. Bharath Petroleum Corporation Limited 13. Coal India Limited 4. Oil and Natural Gas Corporation 14. Indian Railways 5. National Thermal Power Corporation Limited 15. IRCON Limited 6. Steel Authority of India Limited 16. Larsen & Toubro 7. TATA STEEL 17. Shapoorji Pallonji Group 8. Jindal Steels 18. Gammon India 9. Cement Corporation of India 19. GMR Group 10. India cements 20. Hindustan Construction Company
  13. 13. Comparison - Primary Data Example
  14. 14. Comparison - Secondary Data Examples Consumption of Steel - Data by SAIL Revenues from IOCL
  15. 15. Results i. The Liberalized economic policy, adopted by the Govt. of India in July 1991, sought to deregulate & de-license the core sectors with partial disinvestments of Govt. Equity in Public Sector Undertakings & other measures. ii. The most notable changes that took place after 1991 were in the field of employment, technology and trade which in turn increased the GDP constituting the growth of Indian Economy. iii. The Construction Industry became financially and technically secured after 1991 liberalization. iv. As the restrictions on the trading were eased the technology transfer became very easy. v. The liberalization has helped the construction companies create more jobs and which also effects the education system to modernize itself so that we can decrease the dependency on foreign countries. vi. Today it employs over 3 crore people and it generates more than ₹10,000 crores in revenue.
  16. 16. Drawbacks of Liberalization › Many subsidies on materials reduce the income of the country. › Loss to domestic units. › Increase dependency on foreign industries. › Concentration of industries over service sector reduced the scope for innovation. › The small vendors and manufacturers are the ones who will be affected most.
  17. 17. Conclusion By comparing both primary and secondary data it is been concluded that the Null hypothesis defined in the project is rejected and the alternative hypothesis is accepted, which means there is a significant change in availability of technology, resources, access to funds and growth in innovation and employment. Analyzing the above samples we can see that there was dip in the growth of construction from 60 per cent in 1970-71 to 34 per cent in 1990-91. Thereafter, it increased to 48 per cent in 1993-94 and stood at 44 per cent in 1999-2000. The construction industry has contributed an estimated ₹ 670,778 crore to the national GDP in 2011-12 (a share of around 8%). In 2011, there were slightly over 500 construction equipment manufacturing companies in all of India. The sector is labor-intensive and, including indirect jobs, provides employment to more than 35 million people. In the 21st century, there has been an increase in the share of the construction sector in GDP and capital formation. So we can conclude that the Liberalization of Indian economy has helped the construction Industry to grow.
  18. 18. References › Indrajit Bairagya: Liberalization, Informal Sector and Formal-Informal Sectors’ Relationship: A Study of India › G OFORI - Department of Building, National University of Singapore: Challenges of Construction Industries in Developing Countries: Lessons from Various Countries › Sarbapriya Ray - Dept. of Commerce, Shyampur Siddheswari Mahavidyalaya: A Post-Liberalization Period Analysis of Industry Specific Economic Factors Affecting Capacity Utilization in Indian Aluminium Industry › Arpita Mukherjee - Indian council for research on international economic relations: Trade in construction and consultancy services: india and the gats › Shujiro Urata - Senior Economist, Japan Center for Economic Research Professor, Waseda University: China and India Continue High-Speed Growth › Human Resource and Skill, Requirements in the Building, Construction Industry and Real Estate Services: Study on mapping of human resource skill gaps in India till 2022 › Indian Mirror: A report by Builders' Association of India (BAI), Indian Construction Industry, Builders' Association in India.
  19. 19. › Uma Sankaran, Vinoj Abraham, Centre for Development Studies, Trivandrum, Kerala (INDIA): Impact of trade liberalisation on employment › Study for DG Regio Final report: “The impact of globalisation and increased trade liberalisation on Asian regions” › Sonia Bhalotra, University of Bristol, UK: The impact of economic liberalization on employment and wages in India › Indian Mirror: Indian Construction at A Glance iin 2011-2012, Indian Construction Industry, Construction Industry, Construction Sector, Construction Industry of India › Indian Mirror: Indian Construction Equipment Manufacturers Association (ICEMA), Indian Construction Industry, Construction Equipment of India. › Dilip Saikia: Indian Economy after Liberalisation Performance and Challenges › Indian Economics: Industrial policy of 1991 in India › Ashok Bardhan and Cynthia A. Kroll - Haas School of Business, UC Berkeley: Globalization and the Real Estate Industry: Issues, Implications, Opportunities › Dr. (Mrs.)Anita Kumari, Sir Ratan Tata Fellow, Institute of Economic Growth, University of Delhi Enclave: LIBERALISATION AND SOURCES OF INDUSTRIAL GROWTH IN INDIA: AN ANALYSIS BASED ON INPUT-OUTPUT APPROACH › Petia Topalova - Research Dept. IMF, Amit Khandelwal - Columbia GSB, BREAD, NBER: Trade Liberalization and Firm Productivity: The Case of India › Baldev Raj Nayar: India’s Globalization: Evaluating the Economic Consequeces.
  20. 20. THANK YOU