INDIA’S

ECONOMIC
POLICIES
ALBERTO, GENELLA S.
BSN 2-1
 PROFILE
 It is the second-most populous country

 the seventh-largest country by area

 most populous democracy in the world

ECONOMIC POLICY
PRE-1991 ECONOMIC SCENARIO
IN INDIA
PRE-1991 ECONOMIC SCENARIO
IN INDIA
 Policy tended towards protectionism , with a
strong emphasis on import substitution,
industrialism under state monitoring, state
intervention at the micro level in all businesses
especially in labour and financial markets, a large
public sector, business regulation.
 DRAWBACKS OF PRE-1991
ECONIMIC POLICY
 LICENCE RAJ
The “Licence Raj” or “Permit Raj” was the elaborate
system of licences, regulations and accompanying red
tape that were required to set up and run businesses in
India between 1947 and 1990.
 1991 ECONOMIC CRISIS
 By1985, India had started having balance of
payments problems.
 1991 ECONOMIC CRISIS
 By the end of 1990, it was in a serious economic
crisis.
 1991 ECONOMIC CRISIS
 In 1991, India met with an economic crisis –
relating to external debt.
 1991 ECONOMIC CRISIS
 The foreign exchange reserves, which we maintain
to import petroleum and other important items,
dropped to levels that were not sufficient to last
even a fortnight.
 1991 ECONOMIC CRISIS
 The crisis was further compound by rising prices
of essential goods.
 LIBERALISATION
 First aspect of new economic policy
 LIBERALISATION
 Relief for foreign investors
 Revaluation of Indian Currency
 New trade policy
 New industrial policy
 Import technology
 Encouraging foreign tie-ups
 Privatisation in public sector
 IMPACT OF
LIBERALISATION
POSITIVE NEGATIVE
 Increase in foreign  Increased in
investment unemployment
 Increase in production  Decrease in tax receipt
 Technological
advanced
 Increased in GDP
growth rate
 PRIVATISATION
 According to World Bank, “Privatisation is the
transfer of state owned enterprises to the private
sector by sale of going concerns or by sale of
assets following their liquidation”
 Increasing inefficiency on part of public sector led
to privatization
 PRIVATISATION
 Forms of privatization:
 Denationalisation
 Joint venture
 Leasing
 Franchising
IMPACT OF PRIVATISATION
POSITIVE NEGATIVE
 Private companies cut  Public service
cost and be more  Job loses
efficient  Privatisation is
 Increased competition
expensive
 More responsive to
customer complaints
 GLOBALISATION
 Means reduction or removal of government
restriction on the movement of goods and service,
capital, technology and talent across national
boundaries.

 ItIs the increasing interdependence, integration

and interaction among people and cooperation in
various locations around the world.
 IMPACT OF GLOBALISATION
POSITIVE NEGATIVE
 expansion of market  cut throat competitors
 Development of  Rise in monopoly
infrastructure  Take over of domestic
 Higher living standards firms
 International  Increased in
cooperation inequalities
 INDIAN TRADE:
IMPORTS EXPORT
India’s major exports Indian exports comprise
comprise of crude oil mainly of engineering
machinery, military and textile products,
products, fertilizers, precious stones,
chemicals, gems, petroleum products,
antiques and artworks. jewelry, sugar, steel
chemicals, zinc and
leather products.