Business Environ (1)

8/4/2019 Business Environ (1)

1/29


2/29

Industrial Policies-Meaning

Rules, regulations, principles, policies and procedures laiddown by government for regulating, developing, andcontrolling industrial undertakings in the country.

It prescribes roles of the public, private, joint, and co-operative sectors.

It incorporates fiscal and monetary policies, labor policy,and the government attitude towards foreign capital.


3/29

Objectives of Industrial Policies

To accelerate the rate of economic growth and to speed

up industrialization.

Providing opportunities for gainful employment

Eradication of poverty

Protecting and developing a healthy small scale sector

Updating technology and modernization of industry


4/29

Industrial Policy Resolution-1948

1. State Monopolies: included the manufacture ofarms and ammunitions, the production and controlof atomic energy and the ownership of railways

2. Basic industries: government will take over thebasic industry sector undertakings by payingcompensation which is fair and equitable.

3. Private Industries: Rest of the industrial field open toprivate enterprise though the State would alsoprogressively participate in this field.


5/29

Industrial policies in India--1956

The Background

The first five year plan ( 1951-52 to 55-56) was completed. Optimism was

running high

First General election completed

Second Five year plan : Rapid Industrialization, infrastructure and

institution building to priority

Lack of confidence in private sector

Public sector Commending heights

Self reliance : Apprehension towards foreign capital.

.


6/29

Industrial policy-1956

New classifications of industries:

a) Schedule A: Those exclusive for state(17 categories) ,

Arms and ammunitions, atomic energy andrailways..

b) Schedule B: Those which were progressively stateowned(12 categories) but private expected to

supplement.c) Schedule C: All remaining industries left private

sector.


7/29

Industrial policy-1956

Fair and non-discriminatory treatment for privatesector.

Encouragement to village and small-scale enterprises.

Change in attitude towards foreign capital.


8/29

Industrial Policy -1991

The New Policy has four features:Liberalization, privatization, globalization .

Policy focus is on

Deregulating Indian industry;Allowing the industry freedom and flexibility in

responding to market forces. Providing a policy that facilitates and fosters growth of

Indian industry.


9/29

Industrial Policy -1991Industrial Licensing :

Restricted to only certain industries viz

alcohol, cigarettes ,hazardous chemicals, aerospace, defense equipments ,drug and

pharmaceuticals( excluding bulk drugs).

Public sector policy:priority areas for growth of public enterprises in future would be:a) Essential infrastructure goods and services.b) Oil and mineral resources.

c) Technology development and building manufacturing capabilitieswhere private sector investment is inadequate.


10/29

Industrial Policy -1991

Liberalization of Foreign Investment:

Policy towards foreign capital and technology has beenmodified very significantly.

Advantages:

a) technology transfer

b) marketing expertise,

c) introduction of modern managerial techniques

d) new possibilities for promotion of exports.


11/29

Industrial Policy -1991MRTP ACT:

The principal objectives are:

Prevention of concentration of economic power .

Prohibition of monopolistic , restrictive and unfair tradepractices.


12/29

Industrial reforms

Introduction:

The term economic reforms refers to policy reformsundertaken by the central govt. since 1990 to attaincertain significant achievements through the mainapproaches which are as follows:

Stabilization

Restructuring

Globalization


13/29

Major Economic Reforms

Fiscal Reforms:

Reducing the Fiscal Deficit

Banking Sector

Import Licensing Export Orientation

Tax Reforms Direct Tax

Indirect Tax Resource Generation through Divestment

Structural Economic Reforms

Reorientation of Planning


14/29

Banking Reforms

Changing in rate SLR and CRR

Entry of Public and Private Sector in capitalmarket

Operational Flexibility

Relaxation in Licensing of Private Bank

Improve standard of supervision , audit andtechnology

Interest rate deregulation and financialrepression.


15/29

Industrial Reform

Industrial licensing

Foreign Technology

MRTP limit Technological Development

Development of small scale industries

Right of Labor

Foreign Investment

Self reliance


16/29

Significant Consequences

Higher rate of growth

Rapid growth of secondary and tertiary Sectors

Increase in Export and Imports Improved Balance of Payments

Rise in value of Rupee

Less reliance on foreign borrowings

Overall development of Indian economy


17/29

Growth Rate

5.6

1.3

5.1

5.9

7.3 7.3

7.8

4.8

6.5

6.1

90-91 91-92 92-93 93-94 94-95 95-96 96-97 97-98 98-99 99-00

Growth ate


18/29

Indicators Of External Sector

Year Growth of Exports-BOP(%)

Growth ofImports-BOP(%)

Exports/imports(%)

90-91 9 14.4 66.2

95-96 20.3 21.6 74

00-01 21.1 4.6 78.5

2005-2006 23.4 32 67


19/29

WPI Inflation Rate

11.3 11.3

10.110.6

5.4

13

3.1

5.1

3.6

8.1

3.9

4.7

0

2

4

6

8

10

12

14

Primary aarticaes Power Fuel Light Lubricants Manf. Products All comodities


20/29

Conclusion

Policies & reforms have put the Indian economy on ahigher growth path.

Equally important to resolve the immediate liquidityproblem.

To restore the economy on the path of rapid andhealthy economic growth.


21/29

Bibliography

Books Referred; Indian economy reforms Since 1990

Indian economy since 1945

Indian Economy

Indian Economic crises

Role of Manmohan singh in Economic reforms

www.Wikipidia.com

www.Google.com

www.planningcommision.gov.in www.rbi.org.in

www.slideshare.com

www.sribd.com
http://www.wikipidia.com/http://www.google.com/http://www.rbi.org.in/http://www.slideshare.com/http://www.sribd.com/http://www.sribd.com/http://www.sribd.com/http://www.sribd.com/http://www.sribd.com/http://www.sribd.com/http://www.slideshare.com/http://www.slideshare.com/http://www.slideshare.com/http://www.slideshare.com/http://www.slideshare.com/http://www.rbi.org.in/http://www.rbi.org.in/http://www.rbi.org.in/http://www.rbi.org.in/http://www.rbi.org.in/http://www.rbi.org.in/http://www.rbi.org.in/http://www.google.com/http://www.google.com/http://www.google.com/http://www.google.com/http://www.google.com/http://www.wikipidia.com/http://www.wikipidia.com/http://www.wikipidia.com/http://www.wikipidia.com/http://www.wikipidia.com/


22/29

The Indian IT Industry

Until 1991 the IT sector was growing at sluggish pace.The private sector was subjected to numerous controlsand had restricted access to technology

The economic reforms of 1991 changed the Indianbusiness context from one of state-centered, control

orientation to a free, open market orientationespecially for hi-tech companies.


23/29

The Indian software exports increased from US$128million in 1991 to US$6.2 billion in 2001.

The Indian domestic software sales increase fromUS$115 million to US$ 2 billion in the same period.

An ideal example is Infosys which grew from Rs. 1million and 12 employess in 1982 to about Rs. 90million and 300 employees in 1992, to Rs. 19.5 billionand over 10,000 employees in 2001.


24/29

The phenomenal growth rate of Indias software exports, with (ten-year rolling)

average annual growth never dropping below 30%, and overall exports

exceeding US$36bn in 2008/09:


25/29

Software Exports as a Percentage of Total

Exports


26/29

The much higher growth rate of Indian IT exports compared to production for

the domestic market. As a result, the share of exports in total IT output has

risen from 19% in 1991/92 to 69% in 2008/09:


27/29

IT Sector Contribution to GDP

GDP: $1.209 trillion (2008 Estimate)GDP Growth: 6.7% (2009)GDP per capita: $1016

GDP by sector (2008 Estimate):

Agriculture: 17.2%Industry: 29.1%Services: 53.7%


28/29


29/29

QUESTIONS

Documents

Business Environ (1)