Libralisation, Privatisation and

Globalisation
Libralisation
Abolished Industrial licensing for all industries
except for a short list of 18 industries.
1999 - Reduced to 6 industries
drugs and pharmaceuticals, hazardous chemicals,
explosives such as gun powder and detonating
fuses, tobacco products, alcoholic drinks, and
electronic, aerospace and defense equipment.
2015 Drugs and Pharmaceuticals removed
Privatisation
The number of industries reserved for public
sector was reduced from 17 (as per 1956
policy) to only 8 industries
Arms and Ammunition, Atomic Energy, Coal,
Mineral Oil, Mining of Iron Ore, Manganese Ore,
Gold, Silver, Mining of Copper, Lead, Zinc, Atomic
Minerals and Railways.
Currently only Atomic Energy and Railways.
Globalisation
Foreign Investment and Capital
Foreign companies allowed to have majority stake in
India.
In 47 high priority industries, up to 51% FDI was
allowed. For export trading houses, FDI up to 74% was
allowed.
Current position: Numerous sectors has 100% FDI
allowed.
Foreign Investment Promotion Board (FIPB)
established to negotiate with foreign firms and
approve FDI in selected areas.
Abolished June 2017.
 Foreign Technology Agreements
Automatic permission was given for foreign
technology agreements in high priority industries
up to a lump sum payment of Rs. 1 crore.

Board for Industrial and Financial

Reconstruction
The PSUs which were chronically sick and which
are unlikely to be turned around were to be
referred to BIFR.
 March 1991, the BIFR registered 1020 cases and heard 954.
175 were dismissed as not maintainable, and
124 were approved for the company to try to become net-worth
182 revival plans were sanctioned by the board
120 cases be wound up.

2007, the BIFR had registered 5,471 references

1,337 being recommended for winding up and
825 revival schemes being sanctioned.
March 2008 , There were 66 sick Public Sector Enterprises
registered with the board
Government had approved 34 for revival.
 BIFR has had mixed success. Some examples of
successful recoveries are the recovery of Bharat
Heavy Electricals Limited in the 1980s, the
turnaround of Arvind Mills, Scooters India and
the North Eastern Regional Agricultural
Marketing Corporation.
Attempts to revive failed, at Binny and Co., Calico
Mills, Guest Keen Williams, Hindustan
Cables, Metal Box Company and Wyman Gordon.
 MRTP Act
The MRTP Act amended to remove the threshold
limits of assets in respect of MRTP companies and
dominant undertakings.
The MRTP Limit for MRTP companies was made
Rs. 100 Crore.
Currently, MRTP act is replaced by
Competition Act 2002.
 Government established National Renewal
Fund (NRF) to provide a safety net to the
labour affected by technological changes.
This fund was later abolished in 2000.
 2000-08, privatisation in South Asia totalled USD
17.45 b, with the bulk coming from
India (55%) followed by
Pakistan (43%),
Afghanistan, Bangladesh, Nepal and Sri Lanka (2 %).
Infrastructure 51 %
Energy 26%
Financial sector 12%
Manufacturing and services 10%
Primary sector 2%.
https://www.econstor.eu/bitstream/10419/149156/1/dp10297.pdf
 Privatization and Disinvestment in India
50,000.00

45,000.00 46,246.58

40,000.00

35,000.00

30,000.00

25,000.00

23,552.93 23,956.81 24,348.71

23,996.80
20,000.00 22,144.21

15,000.00
15,547.41 15,819.46
13,894.05
10,000.00

5,000.00
5,371.11 5,657.69
4,843.10 4,181.39
3,037.74 3,347.98 2,764.87
0.00 1,912.51 1,871.26
1,860.14 1,569.68
910
0 168.48379.67 0 0

Source: Dept. of Inv and Pub Asset Mgmt.

 Comparison under successive
120000
governments
UF (JDU)
0%
99367
100000
94592

UPA (INC)
80000
48% NDA (BJP)
52%
60000

40000
33655

20000

9961 8515

1289
0
1991-1996 1997-1998 1998-2004 2004-2009 2009-2014 2014-

Source: Dept. of Inv and Pub Asset Mgmt.

 Recent Disinvestments

GOIS SHAREHOLDING
% OF GOIS SHARES METHOD OF POST
NAME OF CPSES DISINVESTED DISINVESTMENT RECEIPTS DISINVESTMENT
HCL .07 Employees OFS 3.73 82.88%
NALCO 9.2125 OFS 1191.73 65.38%
HUDCO 10.193 IPO 1207.35 89.807
Page SUM 0.00
Total SUM 2402.81

http://dipam.gov.in/disinvestments/recent
Companies awaiting disinvestment

Source: Hindustan Times

IT and ITES in India
Entrepreneurship and Startups
 Ease of starting business 151 (2016) 155
(2017)
Ease of doing business 131 (2016) 130
(2017)

http://www.doingbusiness.org/rankings
(world bank)
 Startup India Action Plan
The Action Plan proposes a 19-point action list which includes
self-certification based compliance to reduce the regulatory burden on
startups,
a faster exit mechanism,
tax exemption on profits,
relaxed norms for public procurement,
easier patent filing,
setting up of a INR 100-billion corpus fund that will invest in SEBI
registered VC funds over a period of four years,
setting up of incubation and R&D centres across the country,
promotion of biotechnology sector, etc.

http://startupindia.gov.in/actionplan.php
Queries and discussion