INDIAN INDUSTRIES-ECONOMIC ENVIRONMENT The economic environment of a country has a very strong impact on the economic system

in which it's industries and business firms operate. As far as economic environment of India is concerned, India's is a mixed economy. A simple mixed economic system is characterized by existence of both private and public sectors. The present day mixed economy of India has evolved through a series of policy formulations and legislations. It started with the Industrial Policy Resolution of 1948. This was followed by the Industries (Development and Regulation) Act 1951, the Monopolies and Restrictive Trade Practices (MRTP) Act 1969 and its subsequent amendments, the Industrial Licensing Policy, 1970 and its subsequent amendments and the Foreign Exchange Regulation Act (FERA) 1973 and its subsequent amendments. These enactments and policy formulations have been modified or supplemented from time to time by comprehensive five year plans, the 20-Point Program, controls and regulations on prices, output, production, distribution and trade, various nationalization schemes, anti-poverty schemes, and finally the Economic Reforms initiated in 1991. In view of economic reforms, new Industrial Policy was announced in 1991. The three aims of New Economic Policy were: 1. Liberalization 2. Globalization Reduction of import duties - Encouragement of foreign investment (direct investment up to 51% foreign equity) - Encouragement of foreign technology agreement. 3. Privatization The economic reforms started in 1991, lowered tariff barriers, relaxed FERA regulations and encourage foreign investment in pharmaceuticals.

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