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Structural Reforms Improve the supply side of the economy Measures – Industrial Reforms

Structural Reforms Improve the supply side of the economy Measures – Industrial Reforms Public Sector Reform & Disinvestment Trade & Capital Flows Reforms Financial Sector Reforms A. Banking Sector Reforms B. Capital Market Reforms C. Insurance Sector Reforms.

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Structural Reforms Improve the supply side of the economy Measures – Industrial Reforms

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  1. Structural Reforms Improve the supply side of the economy Measures – Industrial Reforms Public Sector Reform & Disinvestment Trade & Capital Flows Reforms Financial Sector Reforms A. Banking Sector Reforms B. Capital Market Reforms C. Insurance Sector Reforms

  2. Industrial Reforms Industrial Policies from 1951- 1985 Resulted - > Rising unemployment > Rural – Urban disparities > Industrial sickness A. Abolition of Industrial Licensing- Very few industries under compulsory licensing

  3. 2. Permitted foreign investment & foreign technology- FDI – 51% to 100% 3. Reduced the role of public sector- Railway transport 4. Removal of MRTP limit- Monopoly & Restrictive Trade Practices Act. - New Competition Act

  4. 2.Public Sector Reform & Disinvestment- A. Partial disinvestment of equity B. Investment from the market C. Financial & operational powers to Navratna Companies

  5. 3. Trade & Capital Flows Reforms To meet the BOP crisis- A. 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

  6. 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

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