Download SYBCOM (II) - KM Agrawal College

Structural Reforms
Improve the supply side of the economy
Measures –
1.Industrial Reforms
2.Public Sector Reform & Disinvestment
3.Trade & Capital Flows Reforms
4.Financial Sector Reforms
A. Banking Sector Reforms
B. Capital Market Reforms
C. Insurance Sector Reforms
1.Industrial Reforms
Industrial Policies from 1951- 1985
Resulted > Rising unemployment
> Rural – Urban disparities
> Industrial sickness
A. Abolition of Industrial LicensingVery few industries under
compulsory licensing
2. Permitted foreign investment & foreign
technologyFDI – 51% to 100%
3. Reduced the role of public sectorRailway transport
4. Removal of MRTP limitMonopoly & Restrictive Trade Practices
Act.
- New Competition Act
2. Public Sector Reform &
DisinvestmentA. Partial disinvestment of equity
B. Investment from the market
C. Financial & operational powers
to Navratna Companies
3. Trade & Capital Flows Reforms
To meet the BOP crisisA. Liberalization of imports
- import controls were abolished
B. Reduction in tariff structure
- import duty was reduced
C. Promotion of exports
- incentives provided to exporters
D. Change in exchange rate policy
E. Current account convertibility
- Trade account & Current account
- Good for exporters, importers,
studies abroad, travel, medical
expenses
F. Liberalized Capital inflows
- Form of FDI & FIIs
- FIIs – Primary, secondary markets