Indian Economic Liberalisation

1. Presentation on Indian Economic Liberalisation KAL AAJ aur KAL Under the guidance of Mr. Sunil Chaturvedi Presented By:- Shashwat Asawa Vishal Jagetia

2. Pre- Liberalisation age : A struggle

3. Reason for Liberalisation A Balance of Payments (BOP) crisis in 1991 which pushed the country to near bankruptcy The Rupee devalued and economic reforms were forced upon India India central bank had refused new credit and foreign exchange reserves had reduced to the point that India could barely finance three weeks’ worth of imports No FDI & FII Investments

4. Liberalisation : A beginning

5. Financial Sector Reform Financial Sector Reforms refers to the deregulation of domestic financial markets and the liberalization of the capital account Financial Sector Reforms are:- Reform in Banking Sector Reform in Stock Market Reform in Insurance

6. Industrial Sector Reform Industrial Sector was among the first sectors to be liberalized in India in a series of measures Industrial licensing has been abolished except in a small number of sectors where it has been retained on strategic considerations Industrial Sector Reforms are:- Abolition of industrial licensing Restriction were removed on expansion Reduction in the reservation of public sector

7. Trade Sector Reform Trade policy allowing domestic providers (of goods and/or services) to compete more freely in world markets and foreign providers to compete more freely in domestic markets Trade Sector Reform :- Elimination of Import Licensing Rationalization of Tariff Structure Adoption of Flexible Exchange rate

8. Fiscal Sector Reform India's fiscal sector reforms help to raise the rate of savings and investment in India. This further helps to enhance the productivity of public expenditures India has established itself as one of the fastest growing economies in the world. India is also advancing towards the economical growth and improvement in literacy.

9. Impact of these Reforms Annual growth in GDP A rate of growth that will double average income in a decade Rapid Growth in all sectors Exports of information technology enabled services particularly strong

10. Challenges Ahead Political Reforms for Good Governance Re-engineering the Role of the government Administrative and Legal Reforms Strategic Management of the Economy with a focus on knowledge based HRD Activities Fiscal Prudence

11. Cont………………………. Agricultural Sector Reforms Industrial Restructuring Labour Sector Reforms Foreign Trade and Outward Investment Policies Financial Sector Reforms

12. Current India

13. Among the Top-15 Countries in terms of GDP at constant prices Robust Economic Platform Surging Exports Attractive Investment Destination Vibrant Capital Market Pacing Ahead to Emerge as a Major Economy in the World Astounding Demographics Increasing Working Population Vibrant Economy Driving M&A Activities Source : http://www.ibef.org/economy/economyoverview.aspx

14. Major M&A Deals Undertaken Abroad by India Inc. USD 12.1 billion Tata Steel buys Corus Plc USD 6 billion Hindalco acquired Novelis Inc. USD 1.58 billion Essar Steel acquired Algoma Steel USD 730 million Videocon Industries acquired Daewoo Electronics Corporation Limited USD 1.6 billion Suzlon Energy Ltd. acquires REpower

15. Continue.................. USD 11 billion Vodafone buys Hutch USD 0.98 billion Aditya Birla Group increased its stake in Idea Cellular by acquiring 48.14-percent stake USD 1 billion Plans investment in private equity, real estate, and private wealth management USD 1.7 billion Plans to spend on its development operations in India over the next four years USD 0.905 billion Renault, Nissan and Mahindra & Mahindra has initiated a Greenfield automobile plant project in Chennai. Mylan Laboratories acquired a majority stake in Matrix Laboratories USD 0.74 billion

16. Conclusion

17. Arguments in the favor of Liberalization Increase in rate of economic growth Increase in competitiveness of industrial sector Reduction in poverty and inequality Fall in fiscal deficit Control on prices Decline in deficit of BOP Increase in Efficiency

18. Arguments in the Against of Liberalization Pressure by IMF and World Bank More depending on Foreign Debt Dependence on Foreign technology Undue importance to Privatization Problem of Unemployment

19. Thank You