final liberalization

8/9/2019 Final Liberalization

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Name Roll No.

Bhumika Ganveer 25

Darshil Gandhi 24

Amol Gadgeel 22

Amit Gadgeel 21

Pratik Modi 56

Chanky Jain 33


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` The assassination of prime minister Indira Gandhiin 1984, and later of her son Rajiv Gandhi in

1991..

` By the end of 1990, it was in a serious economic

crisis.` The government was close to default.

` Its central bank had refused new credit and

foreign exchange reserves had reduced.

` the country was near to bankruptcy.


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` But it was in 1991 the government of P. V.

Narasimha Rao and his finance minister

Manmohan Singh started breakthrough reforms.` Liberalisation implies liberating the trade &

industry from unwanted government controls and

restriction.

` Liberalisation contains 2 things :-(a) to allow private sector to run those industries

which were earlier reserved for public sector.

(b) Relaxation in rules and regulations made for

private sector.


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POSITION OF INDIAN ECONOMY

TRADE DEFICIT


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INTERNAL AND EXTERNAL DEBTTRAP

SHORTFALL OF INDUSTRIAL AND

AGRICULTURAL PRODUCTION

UNWILLINGNESS OF FOREIGN INVESTORS

GOVERNMENT RESTRICTION ON IMPORTS


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INCREASING IMPORT BILL

INDIA WAS ATTHE BOTTOM OF THE WORLDTRADE REGIME


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RELIEF TO FOREIGN INVESTORS

DEVALUATION OF RUPEES

NEW INDUSTRIAL POLICY

NEW TRADE POLICY

REMOVAL OF IMPORT RESTRICTION

BUDGETARY POLICY

LERMS


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FOREIGN INVESTMENT WAS ALLOWED

APPROVAL FROM RESERVE BANK OF INDIA

BENEFITS FROM FOREIGN INVESTMENT

REMITTANCES OF NRI


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AS A PART OF LIBERALIZATION, NEWINDUSTRIAL POLICY WAS ANNOUNCED BY

GOVERNMENT OF INDIA ON JULY 24, 1991AND 6THAUGUST 1991 RESPECTIVELY


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INDUSTRIALLICENSING DIRECT FOREIGN INVESTMENT MRTP ACT AUTOMATIC CLEARANCE FOREIGN EQUITY PROPOSALS ROLE OF PUBLIC SECTOR BOARD FOR INDUSTRIAL AND FINANCIAL

RECONSTRUCTION (BIFR)


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GENERAL OBJECTIVES

ADVANCE LICENSING SYSTEM

TRANSFERABLE ADVANCE LICENSE

MODVAT

SIXTEEN IMPORT AND EXPORT ITEMS AREDECANALISED


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NEED FOR PRIOR CLEARANCE BY RBIWAIVED

LICENCING ON IMPORT OF CAPITAL GOODSWAS REMOVED

EXPORT-IMPORT POLICY (EXIM)

IMPORT DUTIES ON CERTAIN CONSUMERGOODS WAS REDUCED


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IMPORT DUTIES REDUCED

PRICES OF FERTILIZERS AND CONSUMERPRODUCT INCREASED

LICENSING SCRAPED IN INDUSTRIAL POLICY

ABOLITION OF GOVERNMENT CONTROL OVERCAPITAL ISSUES

INVESTMENT ORIENTED & INDUSTRIAL BOOSTINGBUDGETS


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ANNOUNCED BY RBI

RUPEE BECOMES CONVERTIBLE FOREXTERNALTRANSACTIONS.

SELLING FOREX RECEIPTS AT MARKETDETERMINED PRICE.

RECEIPTS SURRENDERED TO AUTHORIZEDDEALERS

Entitlement of currency notes raised, exporterseligible for foreign exchange & settlement of

quality claims


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Direction for greater financial discipline issue

Foreign banks encouraged to operate in iNdia

Permission to RBI to set up new private banks

FII & NRI are allowed to acquire stakes in equityof private sector

Restructuring of bank management system,

greater operational autonomy to nationalised &

private banks


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NRI Remittances

Industrial approval procedure simplified by Union

ministry of industry

De-controlling steel prices SEBI given legal powers though no autonomy

granted

Privatization of public sector.

Encouraging foreign tie- ups. Fera and mrtp act.

21


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Opening up of financial sector for foreign investors

Implementing recommendations of narsimhan

committee

Restructuring and strengthening of agriculturalsystem

In the industrial front exit policies

Labour legislation to contain labour unrest.


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Worldwide recognition as a potential market

Investment enquiries from reputed investors

Proposal for hardware technology park at Madhapurnear Hyderabad

Agreement to set up coal fired power station atMangalore

Considerable improvement in foreign exchangereserves


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Foreign exchange reserves (US$ billion)

2.217.0

54.1

75.4

118.3

0

50

100

150

1990-91 1995-96 2001-02 2002-03 2003-04

INDIAN FOREIGN EXCHANGE RESERVES: A

STEADY RISE AFTER LIBERALIZATION


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Reduction in Peak Customs Duties on Manufactured items

150

110

5038.5 30 25 20

42

0

20

40

60

80

100

120

140

160

1991 Mar-92 Mar-95 Mar-97 Mar-00 Mar-02 Mar-03 w.e.f March

2004

in

ercent

IMPORT DUTY REDUCTIONS AFTER

LIBERALIZATION


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MNC and foreign investors are in a position ofadvantage.

Indian companies must emerge as important players in

the international arena.

Condition of small and medium units would be further

worse.

Even large and successful Indian companies may not

find it easy to operate in the global market.


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Even if the domestic companies opt for operating only

in the domestic market , they need not necessarily be

safer.

Antagonists of liberalization went to the extent of

believing that it was liberalization that paved the way

for security scam.

As a part of liberalization a simplified customs and

excise regime was to be introduced.

Rules and regulations framed by the bureaucratic gets

a new face lift.


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In respect of imports, customers goods need to be

liberalized too.

Technology imports have been made easier, but theprices have gone up.

SEBI was given statutory powers, while it was not

given autonomy.

The entry of foreign firms with their advanced

technology , establish demanding standards of qualityand efficiency in INDIA.


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final liberalization

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