SlideShare a Scribd company logo
1 of 37
Introduction:
July 1991,India has taken a series of
measures to structure the economy and
improve the BOP position. The new
economic policy introduced changes in
several areas.
The policy have salient feature which are:
-
1.Liberlisation (internal and external)
2.Extending Privatization
3.Globalisation of the economy
Which are known as “LPG”. (libearlisation,
privatisation, globalisation)
2
Meaning of Economic Reform:
 The term economic reform broadly
indicates necessary structural
adjustments to external events. It
include the function of country’s
spending to the level parallel to its
income and thereby reducing fiscal
deficits.
 This requires gradual reduction in
import and increase in export. These
adjustments also requires market
change in order to make economy
flexible.
New Economic policy:
 A new plan in action by the government
to influence production and capital
formation of a country is known as
NEP.
 NEP-New economic policy
 It was started in the year 1991.
 Major effects of NEP were done by
P.V.Narasimhan & Manmohan Singh.
Reasons for implementing NEP:
 There were poor performance of public
sector.
 The scope for private sector was
limited.
 There were sudden fall in Foreign
Exchange Reserves(FER).
 There were more expenditure than
incoming.
 International investors were not
encouraged by government.
 Tax notes were very high so people
Main Features Of Economic Reforms
ECONOMIC
REFORMS
LIBERALISATIO
N
PRIVATISATION
GLOBALISATIO
N
Liberalisation:
 Free from direct or physical control
by the government in the way of trade
is known as liberalisation.
 Before 1991 the were some controls
of Govt. they are:
 Industrial licensing system was a rigid
process.
 They were controlling the price.
 Import licensing.
 Restrictions on investment.
Economic reforms under Liberalization:
 There were four reforms under
liberalization:
 Industrial reforms
 Financial reforms
 Fiscal reforms
 External reforms
 Industrial reforms:
 Abolition of licensing except some products
like cigar etc.
 Contradiction to public sector i.e. number of
items produced by public sector were
reduced.
 Govt. given freedom to import capital.
 Dereservation of production units.
 Producer’s given freedom to what to produce
& how much to produce.
 Financial reforms:
 R.B.I was turned into felicilitator.
 Due to this dramatically change the
banking sector of the country had
expanded a lot.
 It also allowed Foreign Institutional
Investors(FII) to invest money in Indian
market.
 Fiscal reforms:
 It relates to total revenue and total
expenditure of government.
 Before liberalisation, the taxes were
very high & this encouraged tax evasion
by the people.
 After Liberalisation, taxes were
reduced.
 The procedure for paying taxes was
simplified.
 Non-planned expenditure by the Govt.
was reduced
 External reforms:
 Foreign exchange reserves:
 In 1991, Devaluation of rupee so by this
foreign countries can buy Indian good.
 This provided good flow of trade.
 At presently, exchange rate is determined
by supply & demand in international market.
 Foreign trade policy:
 Abolition of import licensing except for some
cases.
 Quantitative restrictions were removed.
 Tariff restrictions were moderated.
 Export duties has withdrawn.
Advantages of liberalization
 Industrial licensing
 Increase the foreign investment.
 Increase the foreign exchange
reserve.
 Increase in consumption and Control
over price.
 Check on corruption.
 Reduction in dependence on external
commercial borrowings
16
Disadvantages of Liberalization
 Increase in unemployment.
 Loss to domestic units.
 Increase dependence on foreign
nations
 Unbalanced development
17
Privatisation:
 Privatisation is defined as the
transfer of function, activity or
organization from the public
sector to private sector.
 Two ways for Privatisation:
1) Sale of public sector units to
private sector.
2) With drawl of public sector
units-joint.
Objectives ofPrivatisation
 To increase efficiency & competitive
power of the enterprises
 To strengthen industrial
management.
 To earn more & more Foreign
currency.
 To make optimum use of resources
 To achieve rapid industrial
development of the country.
Mesures Adopted For Privatisation
 Contraction of Public sector
 Disinvestment
 Sale of shares of public enterprises
 Increase in private sector
 Conversion of loans into shares is
not necessary
 Sick industries
 Memorandum of understanding
Advantages of Privatisation:
 Reduction in economic burden
 Increase in efficiency
 Reduction in sense of
irresponsibility
 Scientific Management
 Reduction in Political Interference
 Encouragement of new Inventions
Disadvantages of Privatization
 Industrial sickness.
 Lack of welfare.
 Class struggle.
 Increase in inequality
 Opposition by employees.
 Problem of financing.
 Increase in unemployment.
 Ignores the weaker sections.
 Ignores the national importance
Public sector reforms
The reforms introduced to support
public sector units are:
Introduction of some awards like:
 Navaratnas
E.g: BPCL,MTNL,Etc.
 Maharatnas
E.g: CIL, ONGC, Etc.
 Miniratnas
E.g: BSNL, ITDCL, Etc.
World Trade Organization:
 The World Trade
Organization (WTO) is a
large international organization to
regulate trade that was established
in 1995.
 As of 15 December, 2005, there
were 153 member countries. In the
WTO, agreements are made on
trade between countries.
Established: 1st January 1995.
Created by: Uruguay Round negotiations (1986-
94).
Budget: 185 million Swiss francs for 2008.
Secretariat staff: 625.
Head: Pascal Lamy (Director-General).
Membership: Countries on map. 153 countries (on
23 July 2008).
New member: Ukraine
 The primary aim of WTO is to implement the
new world trade agreement.
 To promote multilateral trade .
 To promote free trade by abolishing tariff &
non-tariff barriers.
 To enhance competitiveness among all trading
partners so as to benefit consumers.
 To increase the level of production &
productivity with a view to increase the level of
employment in the world.
 To expand & utilize world resources in the most
optimum manner.
 To improve the level of living for the global
population & speed up economic development of
the member nations.
 To take special steps for the development of
•Freer trade cuts the cost of living
•It gives consumers more choice, & a broader range of
qualities to choose from.
•Trade raises incomes.
•Trade stimulates economic growth, & that can be good
news for employment
•The basic principles make the system economically more
efficient, & they cut costs.
•The system allows disputes to be handled
constructively.
•A system based on rules rather than power makes life
easier for all.
Advantages of WTO:
Disadvantages of WTO
•The WTO dictates policy
•The WTO is for free trade at any cost
•The WTO destroys jobs, worsens poverty
•Small countries are powerless in the WTO
•Weaker countries are forced to join the WTO
•The WTO is the tool of powerful lobbies
•Non-tariff barriers
•Competition
Globalisation:
It is defined as a process associated
with increasing openness, growing
economic independence and Deeping
economic integration in the world
economy.
 Reduction of trade barriers
 Free flow of capital
 Free flow of technology
 Free movement of technology
Outsourcing:
 It is a system of hiring business
services from the outside world is
known as Outsourcing.
Advantages of outsourcing:
1) Easy availability of cheap labour
2) Reasonable degree of skill
3) Virgin market
4) Lack of competitive competitors
5) Cheap and abundant availability of raw
material
6) Revolutionary growth of I.T industry
in India
Positive Effects of Globalisation:
 Adoption of new & flexible production
methods.
 Reconstruction of production & Trade
patterns.
 Raise of Foreign capital.
 Qualitative improvement in the
country.
 Rise in the generation of employment.
 Rise in Banking and Foreign sector
efficiency.
 Increase in the technology.
 Loss of domestic industries
 Exploits Human resource
 Decline in income
 Unemployment
 Transfer of natural resources
 Lead to commercial and
political colonism
 Widening gap between rich
and poor
 Dominance of foreign
institutions 34
Positive Effects Of NEP:
 Impressive increase in growth rate of
GDP.
 I.T industry has achieved global
recognition.
 Increase in the Govt. revenue i.e.
increase in national income.
 Increase in foreign exchange reserves.
 Flow of private & foreign investment.
 Recognition of India as an emerging
power.
 Shift from monopoly market to
competitive market.
 Decline in poverty
Negative Effects Of NEP:
 Neglect to agriculture.
 Urban concentration of growth was
high but neglected rural.
 Preference for handicraft were low.
 There is cultural erosion in the
country.
 It is like economic colonization.
Economic reforms 1991

More Related Content

What's hot

Human Capital Formation
Human Capital FormationHuman Capital Formation
Human Capital Formation
AmritaArora48
 
Liberlisation privatisation and globalisation - an apprraisal
Liberlisation privatisation and globalisation - an apprraisalLiberlisation privatisation and globalisation - an apprraisal
Liberlisation privatisation and globalisation - an apprraisal
madan kumar
 

What's hot (20)

Business Environment project class 12 cbse
Business Environment project class 12 cbseBusiness Environment project class 12 cbse
Business Environment project class 12 cbse
 
Make in india - The Way Ahead Class 12 Economics Project
Make in india - The Way Ahead Class 12 Economics ProjectMake in india - The Way Ahead Class 12 Economics Project
Make in india - The Way Ahead Class 12 Economics Project
 
India's Foreign trade policy
India's Foreign trade policyIndia's Foreign trade policy
India's Foreign trade policy
 
Solved Cbse Class 12 Accountancy Full Project(Comprehensive Project, Ratio An...
Solved Cbse Class 12 Accountancy Full Project(Comprehensive Project, Ratio An...Solved Cbse Class 12 Accountancy Full Project(Comprehensive Project, Ratio An...
Solved Cbse Class 12 Accountancy Full Project(Comprehensive Project, Ratio An...
 
Business Studies Class 12th Marketing management Project- Fruit Juice
Business Studies Class 12th Marketing management Project- Fruit JuiceBusiness Studies Class 12th Marketing management Project- Fruit Juice
Business Studies Class 12th Marketing management Project- Fruit Juice
 
Economics project on Production Possibilty Curve
Economics project on Production Possibilty CurveEconomics project on Production Possibilty Curve
Economics project on Production Possibilty Curve
 
foreign exchange rate project class 12
foreign exchange rate project class 12foreign exchange rate project class 12
foreign exchange rate project class 12
 
Human Capital Formation
Human Capital FormationHuman Capital Formation
Human Capital Formation
 
Liberlisation privatisation and globalisation - an apprraisal
Liberlisation privatisation and globalisation - an apprraisalLiberlisation privatisation and globalisation - an apprraisal
Liberlisation privatisation and globalisation - an apprraisal
 
Class 12 Economics Project - Make In India
Class 12 Economics Project - Make In IndiaClass 12 Economics Project - Make In India
Class 12 Economics Project - Make In India
 
Economic Reforms Project
Economic Reforms  ProjectEconomic Reforms  Project
Economic Reforms Project
 
Economic Crisis in SriLanka.pptx
Economic Crisis in SriLanka.pptxEconomic Crisis in SriLanka.pptx
Economic Crisis in SriLanka.pptx
 
National Income
National IncomeNational Income
National Income
 
India’s Foreign Trade: Direction and Composition of Trade
India’s Foreign Trade: Direction and Composition of TradeIndia’s Foreign Trade: Direction and Composition of Trade
India’s Foreign Trade: Direction and Composition of Trade
 
Comparison between India, China and Pakistan
Comparison between India, China and PakistanComparison between India, China and Pakistan
Comparison between India, China and Pakistan
 
The New Economic Policy 1991
The New Economic Policy 1991The New Economic Policy 1991
The New Economic Policy 1991
 
Economic reforms
Economic reformsEconomic reforms
Economic reforms
 
Marketing management project on hair oil class 12th by faizan khan
Marketing management project on hair oil class 12th by faizan khanMarketing management project on hair oil class 12th by faizan khan
Marketing management project on hair oil class 12th by faizan khan
 
New Economic Policy 1991
New Economic Policy 1991 New Economic Policy 1991
New Economic Policy 1991
 
Liberalization Privatization Globalization (LPG)
Liberalization Privatization Globalization (LPG)Liberalization Privatization Globalization (LPG)
Liberalization Privatization Globalization (LPG)
 

Viewers also liked

Defination of national income
Defination of national incomeDefination of national income
Defination of national income
Sushil Bhavsar
 
Globalisation final
Globalisation finalGlobalisation final
Globalisation final
apeksha24
 
Economic reforms by Dipen Shah
Economic reforms by Dipen ShahEconomic reforms by Dipen Shah
Economic reforms by Dipen Shah
dipen shah
 
Economic reforms post 1991 aviation
Economic reforms post 1991 aviationEconomic reforms post 1991 aviation
Economic reforms post 1991 aviation
vkkan80
 
Indian economic policy reforms since 90's
Indian economic policy reforms since 90'sIndian economic policy reforms since 90's
Indian economic policy reforms since 90's
Parth Purohit
 
Foreign trade regulation in india 12-64
Foreign trade regulation in india 12-64Foreign trade regulation in india 12-64
Foreign trade regulation in india 12-64
domsr
 
The Financial Sector Reforms in India
The Financial Sector Reforms in IndiaThe Financial Sector Reforms in India
The Financial Sector Reforms in India
Ajay Dhamija
 

Viewers also liked (20)

Indian economic reforms 1991
Indian economic reforms 1991Indian economic reforms 1991
Indian economic reforms 1991
 
Economic Reforms in India since 1991
Economic Reforms in India since 1991Economic Reforms in India since 1991
Economic Reforms in India since 1991
 
Economic reforms
Economic reformsEconomic reforms
Economic reforms
 
Defination of national income
Defination of national incomeDefination of national income
Defination of national income
 
Globalisation final
Globalisation finalGlobalisation final
Globalisation final
 
Economic reforms by Dipen Shah
Economic reforms by Dipen ShahEconomic reforms by Dipen Shah
Economic reforms by Dipen Shah
 
Lpg
LpgLpg
Lpg
 
india's foreign trade policy
india's foreign trade policyindia's foreign trade policy
india's foreign trade policy
 
Indian economy pre-1991 reforms with globalization
Indian economy pre-1991 reforms with globalizationIndian economy pre-1991 reforms with globalization
Indian economy pre-1991 reforms with globalization
 
Methods of Measuring National Income -National income methods
Methods of Measuring National Income -National income methodsMethods of Measuring National Income -National income methods
Methods of Measuring National Income -National income methods
 
Economic reforms of india
Economic reforms of indiaEconomic reforms of india
Economic reforms of india
 
Economic reforms post 1991 aviation
Economic reforms post 1991 aviationEconomic reforms post 1991 aviation
Economic reforms post 1991 aviation
 
Indian economic policy reforms since 90's
Indian economic policy reforms since 90'sIndian economic policy reforms since 90's
Indian economic policy reforms since 90's
 
Article 112 farmers and budget 2017 18
Article 112 farmers and budget 2017 18Article 112 farmers and budget 2017 18
Article 112 farmers and budget 2017 18
 
Ss lpg economic reforms in india –
Ss lpg economic reforms in india –Ss lpg economic reforms in india –
Ss lpg economic reforms in india –
 
Budget 2017 18 agriculture
Budget 2017 18  agriculture Budget 2017 18  agriculture
Budget 2017 18 agriculture
 
Foreign trade regulation in india 12-64
Foreign trade regulation in india 12-64Foreign trade regulation in india 12-64
Foreign trade regulation in india 12-64
 
Industrial policy of india 1991
Industrial policy of india 1991Industrial policy of india 1991
Industrial policy of india 1991
 
The Financial Sector Reforms in India
The Financial Sector Reforms in IndiaThe Financial Sector Reforms in India
The Financial Sector Reforms in India
 
National income
National  incomeNational  income
National income
 

Similar to Economic reforms 1991

Economicreforms 101101094318-phpapp01
Economicreforms 101101094318-phpapp01Economicreforms 101101094318-phpapp01
Economicreforms 101101094318-phpapp01
Siddharth Singh
 
neweconomicpolicy1991-180901071605.pdf
neweconomicpolicy1991-180901071605.pdfneweconomicpolicy1991-180901071605.pdf
neweconomicpolicy1991-180901071605.pdf
Vishnu J Nair
 
economicreformsinindia-1-161003125253.pdf
economicreformsinindia-1-161003125253.pdfeconomicreformsinindia-1-161003125253.pdf
economicreformsinindia-1-161003125253.pdf
SagarShah193826
 
rationale feature of economic reform.pdf
rationale feature of economic reform.pdfrationale feature of economic reform.pdf
rationale feature of economic reform.pdf
uplevelway
 
International business- Bartlett and ghostly model for internationalization
International business- Bartlett and ghostly model for internationalizationInternational business- Bartlett and ghostly model for internationalization
International business- Bartlett and ghostly model for internationalization
allblue732002
 

Similar to Economic reforms 1991 (20)

LPG
LPGLPG
LPG
 
Liberalisation , privataisation and globalisation
Liberalisation , privataisation and globalisationLiberalisation , privataisation and globalisation
Liberalisation , privataisation and globalisation
 
Economicreforms 101101094318-phpapp01
Economicreforms 101101094318-phpapp01Economicreforms 101101094318-phpapp01
Economicreforms 101101094318-phpapp01
 
Economic Reforms
Economic ReformsEconomic Reforms
Economic Reforms
 
Assignment115
Assignment115Assignment115
Assignment115
 
Private,public and global enterprises.pptx 2
Private,public and global enterprises.pptx 2Private,public and global enterprises.pptx 2
Private,public and global enterprises.pptx 2
 
19202008
1920200819202008
19202008
 
New economic policy and SAP
New economic policy and SAPNew economic policy and SAP
New economic policy and SAP
 
ECONOMIC REFORMS IN INDIA
ECONOMIC REFORMS IN INDIA ECONOMIC REFORMS IN INDIA
ECONOMIC REFORMS IN INDIA
 
New Economic Reforms and LPG 1991
New Economic Reforms and LPG 1991New Economic Reforms and LPG 1991
New Economic Reforms and LPG 1991
 
neweconomicpolicy1991-180901071605.pdf
neweconomicpolicy1991-180901071605.pdfneweconomicpolicy1991-180901071605.pdf
neweconomicpolicy1991-180901071605.pdf
 
New economic policy 1991
New economic policy 1991New economic policy 1991
New economic policy 1991
 
economicreformsinindia-1-161003125253.pdf
economicreformsinindia-1-161003125253.pdfeconomicreformsinindia-1-161003125253.pdf
economicreformsinindia-1-161003125253.pdf
 
rationale feature of economic reform.pdf
rationale feature of economic reform.pdfrationale feature of economic reform.pdf
rationale feature of economic reform.pdf
 
LPG - Indian Scenario
LPG - Indian ScenarioLPG - Indian Scenario
LPG - Indian Scenario
 
Economic reforms scince 1991
Economic reforms scince 1991Economic reforms scince 1991
Economic reforms scince 1991
 
Liberalisation
LiberalisationLiberalisation
Liberalisation
 
LPG
LPG LPG
LPG
 
International business- Bartlett and ghostly model for internationalization
International business- Bartlett and ghostly model for internationalizationInternational business- Bartlett and ghostly model for internationalization
International business- Bartlett and ghostly model for internationalization
 
Economic reforms since 1991 new economic policy
Economic reforms since 1991  new economic policyEconomic reforms since 1991  new economic policy
Economic reforms since 1991 new economic policy
 

More from Pranav Krishna (10)

Pert, cpm & gert
Pert, cpm & gertPert, cpm & gert
Pert, cpm & gert
 
Statistics
StatisticsStatistics
Statistics
 
Thermal pollution
Thermal pollutionThermal pollution
Thermal pollution
 
Air pollution.pptx
Air pollution.pptxAir pollution.pptx
Air pollution.pptx
 
Crop production
Crop productionCrop production
Crop production
 
Evolution and history of computer
Evolution and history of computerEvolution and history of computer
Evolution and history of computer
 
Measures of central tendancy
Measures of central tendancy Measures of central tendancy
Measures of central tendancy
 
Tabulation
Tabulation Tabulation
Tabulation
 
Soil pollution
Soil pollutionSoil pollution
Soil pollution
 
Index number
Index numberIndex number
Index number
 

Recently uploaded

Rapport annuel de Encevo Group pour l'année 2023
Rapport annuel de Encevo Group pour l'année 2023Rapport annuel de Encevo Group pour l'année 2023
Rapport annuel de Encevo Group pour l'année 2023
Paperjam_redaction
 
Abortion pills in Dammam Saudi Arabia | +966572737505 |Get Cytotec
Abortion pills in Dammam Saudi Arabia | +966572737505 |Get CytotecAbortion pills in Dammam Saudi Arabia | +966572737505 |Get Cytotec
Abortion pills in Dammam Saudi Arabia | +966572737505 |Get Cytotec
Abortion pills in Riyadh +966572737505 get cytotec
 
TriStar Gold- 05-13-2024 corporate presentation
TriStar Gold- 05-13-2024 corporate presentationTriStar Gold- 05-13-2024 corporate presentation
TriStar Gold- 05-13-2024 corporate presentation
Adnet Communications
 
快速制作(otago毕业证书)新西兰奥塔哥大学毕业证 毕业文凭证书-国外文凭
快速制作(otago毕业证书)新西兰奥塔哥大学毕业证 毕业文凭证书-国外文凭快速制作(otago毕业证书)新西兰奥塔哥大学毕业证 毕业文凭证书-国外文凭
快速制作(otago毕业证书)新西兰奥塔哥大学毕业证 毕业文凭证书-国外文凭
vytqf
 

Recently uploaded (20)

Rapport annuel de Encevo Group pour l'année 2023
Rapport annuel de Encevo Group pour l'année 2023Rapport annuel de Encevo Group pour l'année 2023
Rapport annuel de Encevo Group pour l'année 2023
 
Lion One Corporate Presentation May 2024
Lion One Corporate Presentation May 2024Lion One Corporate Presentation May 2024
Lion One Corporate Presentation May 2024
 
Economic Risk Factor Update: May 2024 [SlideShare]
Economic Risk Factor Update: May 2024 [SlideShare]Economic Risk Factor Update: May 2024 [SlideShare]
Economic Risk Factor Update: May 2024 [SlideShare]
 
Abortion pills in Dammam Saudi Arabia | +966572737505 |Get Cytotec
Abortion pills in Dammam Saudi Arabia | +966572737505 |Get CytotecAbortion pills in Dammam Saudi Arabia | +966572737505 |Get Cytotec
Abortion pills in Dammam Saudi Arabia | +966572737505 |Get Cytotec
 
black magic removal amil baba in pakistan karachi islamabad america canada uk...
black magic removal amil baba in pakistan karachi islamabad america canada uk...black magic removal amil baba in pakistan karachi islamabad america canada uk...
black magic removal amil baba in pakistan karachi islamabad america canada uk...
 
Amil baba australia kala jadu in uk black magic in usa
Amil baba australia kala jadu in uk black magic in usaAmil baba australia kala jadu in uk black magic in usa
Amil baba australia kala jadu in uk black magic in usa
 
Production and Cost of the firm with curves
Production and Cost of the firm with curvesProduction and Cost of the firm with curves
Production and Cost of the firm with curves
 
Famous Kala Jadu, Kala ilam specialist in USA and Bangali Amil baba in Saudi ...
Famous Kala Jadu, Kala ilam specialist in USA and Bangali Amil baba in Saudi ...Famous Kala Jadu, Kala ilam specialist in USA and Bangali Amil baba in Saudi ...
Famous Kala Jadu, Kala ilam specialist in USA and Bangali Amil baba in Saudi ...
 
amil baba kala jadu expert uk amil baba kala jadu removal uk amil baba in mal...
amil baba kala jadu expert uk amil baba kala jadu removal uk amil baba in mal...amil baba kala jadu expert uk amil baba kala jadu removal uk amil baba in mal...
amil baba kala jadu expert uk amil baba kala jadu removal uk amil baba in mal...
 
Amil baba powerful kala jadu in islamabad rawalpindi - Amil baba in lahore Am...
Amil baba powerful kala jadu in islamabad rawalpindi - Amil baba in lahore Am...Amil baba powerful kala jadu in islamabad rawalpindi - Amil baba in lahore Am...
Amil baba powerful kala jadu in islamabad rawalpindi - Amil baba in lahore Am...
 
STRATEGIC MANAGEMENT VIETTEL TELECOM GROUP
STRATEGIC MANAGEMENT VIETTEL TELECOM GROUPSTRATEGIC MANAGEMENT VIETTEL TELECOM GROUP
STRATEGIC MANAGEMENT VIETTEL TELECOM GROUP
 
Pension dashboards forum 1 May 2024 (1).pdf
Pension dashboards forum 1 May 2024 (1).pdfPension dashboards forum 1 May 2024 (1).pdf
Pension dashboards forum 1 May 2024 (1).pdf
 
Pinakes Apotelesmatwn_4h tropopoihsh entaxhs.pdf
Pinakes Apotelesmatwn_4h tropopoihsh entaxhs.pdfPinakes Apotelesmatwn_4h tropopoihsh entaxhs.pdf
Pinakes Apotelesmatwn_4h tropopoihsh entaxhs.pdf
 
Black magic specialist in pakistan usa dubai oman karachi multan canada londo...
Black magic specialist in pakistan usa dubai oman karachi multan canada londo...Black magic specialist in pakistan usa dubai oman karachi multan canada londo...
Black magic specialist in pakistan usa dubai oman karachi multan canada londo...
 
TriStar Gold- 05-13-2024 corporate presentation
TriStar Gold- 05-13-2024 corporate presentationTriStar Gold- 05-13-2024 corporate presentation
TriStar Gold- 05-13-2024 corporate presentation
 
Current scenario of Energy Retail utilities market in UK
Current scenario of Energy Retail utilities market in UKCurrent scenario of Energy Retail utilities market in UK
Current scenario of Energy Retail utilities market in UK
 
GIFT City Overview India's Gateway to Global Finance
GIFT City Overview  India's Gateway to Global FinanceGIFT City Overview  India's Gateway to Global Finance
GIFT City Overview India's Gateway to Global Finance
 
快速制作(otago毕业证书)新西兰奥塔哥大学毕业证 毕业文凭证书-国外文凭
快速制作(otago毕业证书)新西兰奥塔哥大学毕业证 毕业文凭证书-国外文凭快速制作(otago毕业证书)新西兰奥塔哥大学毕业证 毕业文凭证书-国外文凭
快速制作(otago毕业证书)新西兰奥塔哥大学毕业证 毕业文凭证书-国外文凭
 
Solution Manual For Financial Statement Analysis, 13th Edition By Charles H. ...
Solution Manual For Financial Statement Analysis, 13th Edition By Charles H. ...Solution Manual For Financial Statement Analysis, 13th Edition By Charles H. ...
Solution Manual For Financial Statement Analysis, 13th Edition By Charles H. ...
 
No 1 Top Love marriage specialist baba ji amil baba kala ilam powerful vashik...
No 1 Top Love marriage specialist baba ji amil baba kala ilam powerful vashik...No 1 Top Love marriage specialist baba ji amil baba kala ilam powerful vashik...
No 1 Top Love marriage specialist baba ji amil baba kala ilam powerful vashik...
 

Economic reforms 1991

  • 1.
  • 2. Introduction: July 1991,India has taken a series of measures to structure the economy and improve the BOP position. The new economic policy introduced changes in several areas. The policy have salient feature which are: - 1.Liberlisation (internal and external) 2.Extending Privatization 3.Globalisation of the economy Which are known as “LPG”. (libearlisation, privatisation, globalisation) 2
  • 3.
  • 4. Meaning of Economic Reform:  The term economic reform broadly indicates necessary structural adjustments to external events. It include the function of country’s spending to the level parallel to its income and thereby reducing fiscal deficits.  This requires gradual reduction in import and increase in export. These adjustments also requires market change in order to make economy flexible.
  • 5.
  • 6. New Economic policy:  A new plan in action by the government to influence production and capital formation of a country is known as NEP.  NEP-New economic policy  It was started in the year 1991.  Major effects of NEP were done by P.V.Narasimhan & Manmohan Singh.
  • 7. Reasons for implementing NEP:  There were poor performance of public sector.  The scope for private sector was limited.  There were sudden fall in Foreign Exchange Reserves(FER).  There were more expenditure than incoming.  International investors were not encouraged by government.  Tax notes were very high so people
  • 8. Main Features Of Economic Reforms ECONOMIC REFORMS LIBERALISATIO N PRIVATISATION GLOBALISATIO N
  • 9.
  • 10. Liberalisation:  Free from direct or physical control by the government in the way of trade is known as liberalisation.  Before 1991 the were some controls of Govt. they are:  Industrial licensing system was a rigid process.  They were controlling the price.  Import licensing.  Restrictions on investment.
  • 11. Economic reforms under Liberalization:  There were four reforms under liberalization:  Industrial reforms  Financial reforms  Fiscal reforms  External reforms
  • 12.  Industrial reforms:  Abolition of licensing except some products like cigar etc.  Contradiction to public sector i.e. number of items produced by public sector were reduced.  Govt. given freedom to import capital.  Dereservation of production units.  Producer’s given freedom to what to produce & how much to produce.
  • 13.  Financial reforms:  R.B.I was turned into felicilitator.  Due to this dramatically change the banking sector of the country had expanded a lot.  It also allowed Foreign Institutional Investors(FII) to invest money in Indian market.
  • 14.  Fiscal reforms:  It relates to total revenue and total expenditure of government.  Before liberalisation, the taxes were very high & this encouraged tax evasion by the people.  After Liberalisation, taxes were reduced.  The procedure for paying taxes was simplified.  Non-planned expenditure by the Govt. was reduced
  • 15.  External reforms:  Foreign exchange reserves:  In 1991, Devaluation of rupee so by this foreign countries can buy Indian good.  This provided good flow of trade.  At presently, exchange rate is determined by supply & demand in international market.  Foreign trade policy:  Abolition of import licensing except for some cases.  Quantitative restrictions were removed.  Tariff restrictions were moderated.  Export duties has withdrawn.
  • 16. Advantages of liberalization  Industrial licensing  Increase the foreign investment.  Increase the foreign exchange reserve.  Increase in consumption and Control over price.  Check on corruption.  Reduction in dependence on external commercial borrowings 16
  • 17. Disadvantages of Liberalization  Increase in unemployment.  Loss to domestic units.  Increase dependence on foreign nations  Unbalanced development 17
  • 18.
  • 19. Privatisation:  Privatisation is defined as the transfer of function, activity or organization from the public sector to private sector.  Two ways for Privatisation: 1) Sale of public sector units to private sector. 2) With drawl of public sector units-joint.
  • 20. Objectives ofPrivatisation  To increase efficiency & competitive power of the enterprises  To strengthen industrial management.  To earn more & more Foreign currency.  To make optimum use of resources  To achieve rapid industrial development of the country.
  • 21. Mesures Adopted For Privatisation  Contraction of Public sector  Disinvestment  Sale of shares of public enterprises  Increase in private sector  Conversion of loans into shares is not necessary  Sick industries  Memorandum of understanding
  • 22. Advantages of Privatisation:  Reduction in economic burden  Increase in efficiency  Reduction in sense of irresponsibility  Scientific Management  Reduction in Political Interference  Encouragement of new Inventions
  • 23. Disadvantages of Privatization  Industrial sickness.  Lack of welfare.  Class struggle.  Increase in inequality  Opposition by employees.  Problem of financing.  Increase in unemployment.  Ignores the weaker sections.  Ignores the national importance
  • 24. Public sector reforms The reforms introduced to support public sector units are: Introduction of some awards like:  Navaratnas E.g: BPCL,MTNL,Etc.  Maharatnas E.g: CIL, ONGC, Etc.  Miniratnas E.g: BSNL, ITDCL, Etc.
  • 25. World Trade Organization:  The World Trade Organization (WTO) is a large international organization to regulate trade that was established in 1995.  As of 15 December, 2005, there were 153 member countries. In the WTO, agreements are made on trade between countries.
  • 26. Established: 1st January 1995. Created by: Uruguay Round negotiations (1986- 94). Budget: 185 million Swiss francs for 2008. Secretariat staff: 625. Head: Pascal Lamy (Director-General). Membership: Countries on map. 153 countries (on 23 July 2008). New member: Ukraine
  • 27.  The primary aim of WTO is to implement the new world trade agreement.  To promote multilateral trade .  To promote free trade by abolishing tariff & non-tariff barriers.  To enhance competitiveness among all trading partners so as to benefit consumers.  To increase the level of production & productivity with a view to increase the level of employment in the world.  To expand & utilize world resources in the most optimum manner.  To improve the level of living for the global population & speed up economic development of the member nations.  To take special steps for the development of
  • 28. •Freer trade cuts the cost of living •It gives consumers more choice, & a broader range of qualities to choose from. •Trade raises incomes. •Trade stimulates economic growth, & that can be good news for employment •The basic principles make the system economically more efficient, & they cut costs. •The system allows disputes to be handled constructively. •A system based on rules rather than power makes life easier for all. Advantages of WTO:
  • 29. Disadvantages of WTO •The WTO dictates policy •The WTO is for free trade at any cost •The WTO destroys jobs, worsens poverty •Small countries are powerless in the WTO •Weaker countries are forced to join the WTO •The WTO is the tool of powerful lobbies •Non-tariff barriers •Competition
  • 30.
  • 31. Globalisation: It is defined as a process associated with increasing openness, growing economic independence and Deeping economic integration in the world economy.  Reduction of trade barriers  Free flow of capital  Free flow of technology  Free movement of technology
  • 32. Outsourcing:  It is a system of hiring business services from the outside world is known as Outsourcing. Advantages of outsourcing: 1) Easy availability of cheap labour 2) Reasonable degree of skill 3) Virgin market 4) Lack of competitive competitors 5) Cheap and abundant availability of raw material 6) Revolutionary growth of I.T industry in India
  • 33. Positive Effects of Globalisation:  Adoption of new & flexible production methods.  Reconstruction of production & Trade patterns.  Raise of Foreign capital.  Qualitative improvement in the country.  Rise in the generation of employment.  Rise in Banking and Foreign sector efficiency.  Increase in the technology.
  • 34.  Loss of domestic industries  Exploits Human resource  Decline in income  Unemployment  Transfer of natural resources  Lead to commercial and political colonism  Widening gap between rich and poor  Dominance of foreign institutions 34
  • 35. Positive Effects Of NEP:  Impressive increase in growth rate of GDP.  I.T industry has achieved global recognition.  Increase in the Govt. revenue i.e. increase in national income.  Increase in foreign exchange reserves.  Flow of private & foreign investment.  Recognition of India as an emerging power.  Shift from monopoly market to competitive market.  Decline in poverty
  • 36. Negative Effects Of NEP:  Neglect to agriculture.  Urban concentration of growth was high but neglected rural.  Preference for handicraft were low.  There is cultural erosion in the country.  It is like economic colonization.