Group members
 Savin Shetty  Bharat Shetty  Prajna Pujari  Ankita Shetty  Ashwin Shetty  Sachin Shetty  Lalit Pandey

INTRODUCTION

4% from the peak level of 10.5% in 1988-89.6% of GDP. Internal debts rose to about 50% of GDP with interest payments draining about 39% of total revenue collections of the central government.Introduction  There was a serious fiscal crisis in which fiscal deficit reached the level of 6.   GNP growth rate fell to 1. .

iii.  Inflation rate based both on WPI & CPI soared high at 13-14%. Food grain production:-5. Agriculture promotion: -2.1%.3%.Negative growth rates i. . Industrial production:-0. ii.8%.

 In may 1991. the government had to lease 20 tons of gold out of its stock to the SBI to enable it to sell the gold with repurchase option after 6 months.7% vis-à-vis US dollars. In addition RBI was allowed to pledge 47 tons of gold to the BOE to raise a loan of $600mn.5%. .4% & exports by 1.  Rupee depreciated by 26. Foreign trade shrunk imports falling by 19.  Confidence of the international financial institutions was badly shaken.  Fall in foreign exchange reserves.

MAJOR STEPS TAKEN TO MANAGE THE CRISIS .

 Abolition of industrial licensing for industrial projects except 18 industries of high strategic & environmental importance.Major steps taken to manage the crisis  Fiscal correction aimed at reducing fiscal deficit by about Rs 7700 core in 1991-92 compared to 1990-91.  Announcement of new industrial policy in June 1991. . About 80% of the industries were delicensed.

 Foreign investment promotion board (FIPB) established to negotiate proposals from international firms & expedite clearances of the investment proposals.  Bringing back of gold earlier pledged to the BOE & BOJ. .  Continuance of the measures of import control & credit squeeze. 9 areas in basic & core industries earlier reserved for public sector opened to private sector  Limit of foreign equity holding raised from 40% to 51% in a wide range of priority industries.

Import licensing was eliminated in many goods & advance licensing system was simplified. Foreign investment promotion board established to negotiate proposals from large international firms Rupee devaluation by 18 percent Negotiation of $500 million structural adjustment .

LIBERALIZATION. GLOBALIZATION . PRIVATIZATION.

LIBERALIZATION .

Liberalization  DELICENSING  FREEDOM FROM LOCATIONAL REQUIREMENTS AND GOVERNMENT CLEARANCE  PERMISSION TO CORPORATES FOR BUYBACK OF SHARES  CORPORATISATION OF DEPARTMENTAL UNDERTAKINGS AND PUBLIC UNDERTAKING  INCREASE IN THE INVESTMENT CEILING OF SMALL SCALE ENTERPRISES .

LIBERALIZATION OF TAX PROVISION FOR SELECTED SECTOR FREEDOM TO BANKS TO ENTER THE INSURANCE SECTOR FREEDOM TO TRANSFER LICNSES AND ASSETS REMOVAL OF RESTRICTION ON MOVEMENT OF PRODUCTS AND SALE PURCHASE OF ASSETS .

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Privatization DIVESTITURE DENATIONALIZATION FRANCHISING OF PUBLIC SECTOR SERVICES TO DESIGNATED PRIVATE SECTOR UNITS LICENSING OF TECHNOLOGY OF PUBLIC SECTOR UNITS TO PRIVATE ENTERPRISE] .

GOVERNMENT WITHDRAWAL PRIVATIZATION OF MANAGEMENT OPENINING UP OF A NUMBER OF CORE SECTORS EARLIER RESERVED FOR PUBLIC SECTOR TO PRIVATE INVESTMENT FREEDOM TO BANKS TO DETERMINE THEIR OWN LENDING RATES .

GLOBALIZATION .

Globalization REDUCTION IN THE SCOPE OF RESTRICTIVE CANALIZED TRADE INCREASE IN THE LIMIT OF FOREIGN DIRECT INVESTMENT IN A NUMBER OF AREAS PERMISSION TO EXPORTERS TO KEEP FOREIGN EXCHANGE ACCOUNTS CREATION OF FOREIGN PROMOTION BOARD .

SUSTAINED REDUCTION IN THE CUSTOM DUTY RATES ON NUMBER OF IMPORT ITEMS REDUCTION OR ELIMINATION OF QUANTITATIVE RESTICTIONS ON A NUMBER OF IMPORT ITEMS REPLACEMENT OF FERA –MORE FEMA(1999) .

REFORM STRATEGY .

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 Elimination of losses.  Supplementary efforts. .  Improvement in quality of taxation.Fiscal Strategy  Reduction in fiscal deficit.  Reduction in inflation rate.  Improve fiscal balance.

.Monetary Strategy Macro-economic management. Interest rates reduced. Not be frequently used as a tool. Repurchase operations.

Disinvestment in public sector. . Withdrawal of power. Increase in foreign share. Competitive market structure.Industry & Labour Strategy Removing regulatory obstacles. Growth in productivity.

AGRICULTURE TRADE INFRASTRU C-TURE STRATEGY .

. Minimization of imports. Removal of restrictions. Reduction in import tariff. Fixation of tariff.TRADE Liberalize foreign trade.

AGRICULTURE Growth rate  Agriculture products within the country.  Quality improvement. Investment & capital Credit structure Pricing policy - .  CRP(credit relief package)  Increase in import duty.

INFRASTRUCTURE TRAI ( telecom regulatory authority of India). . Private sector – BOT Golden Quadrilateral project.

rediff.wikipedia.BIBLIOGRAPHY  www.htm .com  http://business.com/slide-show/2009/may/25/slide- show-5-lord-desai-on-recession-and-indian-politics.google.com  www.

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