Indian Economic Liberalisation


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Indian Economic Liberalisation

  1. 1. Presentationon Indian Economic LiberalisationKAL AAJ aur KAL <br />Under the guidance of <br />Mr. Sunil Chaturvedi<br />Presented By:-<br />Shashwat Asawa <br />Vishal Jagetia<br />
  2. 2. Pre-Liberalisation age : A struggle<br />
  3. 3. Reason for Liberalisation<br /> A Balance of Payments (BOP) crisis in 1991 which pushed the country to near bankruptcy<br />The Rupee devalued and economic reforms were forced upon India<br />India central bank had refused new credit and foreign exchange reserves had reduced to the point that India could barely finance three weeks’ worth of imports <br /> No FDI & FII Investments<br />
  4. 4. Liberalisation : A beginning <br />
  5. 5.
  6. 6. Financial Sector Reform<br /> Financial Sector Reforms refers to the deregulation of domestic financial markets and the liberalization of the capital account<br />Financial Sector Reforms are:-<br />Reform in Banking Sector<br />Reform in Stock Market<br /> Reform in Insurance<br />
  7. 7. Industrial Sector Reform<br /> Industrial Sector was among the first sectors to be liberalized in India in a series of measures <br /> Industrial licensing has been abolished except in a small number of sectors where it has been retained on strategic considerations<br /> Industrial Sector Reforms are:-<br />Abolition of industrial licensing<br />Restriction were removed on expansion <br /> Reduction in the reservation of public sector<br />
  8. 8. 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<br />Trade Sector Reform :-<br />Elimination of Import Licensing<br /> Rationalization of Tariff Structure<br /> Adoption of Flexible Exchange rate<br />Trade Sector Reform<br />
  9. 9. Fiscal Sector Reform<br /><ul><li>India's fiscal sector reforms help to raise the rate of savings and investment in India. This further helps to enhance the productivity of public expenditures
  10. 10. India has established itself as one of the fastest growing economies in the world. India is also advancing towards the economical growth and improvement in literacy.</li></li></ul><li>Impact of these Reforms<br />Annual growth in GDP<br />A rate of growth that will double average income in a decade <br />Rapid Growth in all sectors <br />Exports of information technology enabled services particularly strong<br />
  11. 11. Challenges Ahead<br />Political Reforms for Good Governance<br />Re-engineering the Role of the government<br />Administrative and Legal Reforms<br />Strategic Management of the Economy with a focus on knowledge based HRD Activities<br />Fiscal Prudence<br />
  12. 12. Cont……………………….<br />Agricultural Sector Reforms<br />Industrial Restructuring<br />Labour Sector Reforms<br />Foreign Trade and Outward Investment Policies<br />Financial Sector Reforms<br />
  13. 13. Current India<br />
  14. 14. <ul><li>Among the Top-15 Countries in terms of GDP at constant prices
  15. 15. Robust Economic Platform
  16. 16. Surging Exports
  17. 17. Attractive Investment Destination
  18. 18. Vibrant Capital Market
  19. 19. Pacing Ahead to Emerge as a Major Economy in the World
  20. 20. Astounding Demographics
  21. 21. Increasing Working Population
  22. 22. Vibrant Economy Driving M&A Activities</li></ul>Source:<br />
  23. 23. Major M&A Deals Undertaken Abroad by India Inc.<br />Tata Steel buys Corus Plc<br />USD 12.1 billion <br />Hindalco acquired Novelis Inc.<br />USD 6 billion <br />Essar Steel acquired Algoma Steel <br />USD 1.58 billion <br />Suzlon Energy Ltd. acquires REpower<br />Videocon Industries acquired Daewoo Electronics Corporation Limited<br />USD 1.6 billion <br />USD 730 million <br />
  24. 24. Continue..................<br />Vodafone buys Hutch<br />USD 11 billion <br />Plans to spend on its development operations in India over the next four years<br />USD 1.7 billion<br />Plans investment in private equity, real estate, and private wealth management<br />USD 1 billion<br />Aditya Birla Group increased its stake in Idea Cellular by acquiring 48.14-percent stake<br />USD 0.98 billion <br />Renault, Nissan and Mahindra & Mahindra has initiated a Greenfield automobile plant project in Chennai.<br />USD 0.905 billion<br />Mylan Laboratories acquired a majority stake in Matrix Laboratories<br />USD 0.74 billion<br />
  25. 25. Conclusion<br />
  26. 26. Arguments in the favor of Liberalization<br /><ul><li>Increase in rate of economic growth
  27. 27. Increase in competitiveness of industrial sector
  28. 28. Reduction in poverty and inequality
  29. 29. Fall in fiscal deficit
  30. 30. Control on prices
  31. 31. Decline in deficit of BOP
  32. 32. Increase in Efficiency</li></li></ul><li>Arguments in the Against of Liberalization <br />Pressure by IMF and World Bank<br />More depending on Foreign Debt<br />Dependence on Foreign technology<br />Undue importance to Privatization<br />Problem of Unemployment<br />
  33. 33. Thank You<br />