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Under the guidance of

Mr. Sunil Chaturvedi

Presented By:-

Shashwat Asawa

Vishal Jagetia


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Reason for Liberalisation

y A Balance of Payments (BOP) crisis in 1991 which pushed the

country to near bankruptcy

y The Rupee devalued and economic reforms were forced upon

India

y 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

y No FDI & FII Investments


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Reformstaken duringLiberalisation

FinancialFinancialSectorSector

IndustrialIndustrialSectorSector

TradeTradeSectorSector

FiscalFiscal

SectorSector


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Financial Sector ReformFinancial Sector Reforms refers to the deregulation of

domestic financial markets and the liberalization of the

capital account

Financial Sector Reforms are:-y Reform in Banking Sector

y Reform in Stock Market

y

Reform in Insurance


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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 strategicconsiderations

Industrial Sector Reforms are:-

yAbolition of industrial licensing

yRestriction were removed on expansion

y Reduction in the reservation of public sector


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Trade Sector Reform

Trade policy allowing domestic providers (of goods and/orservices) to compete more freely in world markets and

foreign providers to compete more freely in domestic

markets

Trade Sector Reform :-

yElimination of Import Licensing

y Rationalization ofTariff Structure

y Adoption ofFlexible Exchange rate


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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.


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Impact of these Reformsy Annual growth in GDP

y A rate of growth that willdouble average income in adecade

y Rapid Growth in all sectors

y Exports of information

technology enabled servicesparticularly strong


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Challenges Ahead

yPolitical Reforms for Good Governance

yRe-engineering the Role of the government

yAdministrative and Legal Reforms

y

Strategic Management of the Economy with a focus onknowledge based HRD Activities

y Fiscal Prudence


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Cont.

yAgricultural Sector Reforms

y Industrial Restructuring

y Labour Sector Reforms

y

Foreign Trade and Outward Investment Policies

y Financial Sector Reforms


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y Among the Top-15 Countries in terms of GDP at constant prices

y Robust Economic Platform

y Surging Exports

y Attractive Investment Destination

y Vibrant Capital Market

y Pacing Ahead to Emerge as a Major Economy in the World

y Astounding Demographics

y Increasing Working Population

y Vibrant Economy Driving M&A Activities

Source: http://www.ibef.org/economy/economyoverview.aspx


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Major M&A Deals Undertaken Abroad by India Inc.

USD 12.1 billionUSD 12.1 billionTata Steel buys Corus PlcTata Steel buys Corus Plc

USD 6 billionUSD 6 billionHin alco acquire Novelis Inc.Hin alco acquire Novelis Inc.

USD 1.58 billionUSD 1.58 billionEssar Steel acquire Algoma SteelEssar Steel acquire Algoma Steel

USD 730 millionUSD 730 millionVi eocon In ustries acquire Daewoo

Electronics Corporation LimiteVi eocon In ustries acquire Daewoo

Electronics Corporation Limite

USD 1.6 billionUSD 1.6 billionSuzlon Energy Lt . acquires REpowerSuzlon Energy Lt . acquires REpower


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Arguments in the favor of

Liberalization

y Increase in rate of economic growth

y Increase in competitiveness of industrial sector

y Reduction in poverty and inequality

y Fall in fiscal deficit

y Control on prices

y Decline in deficit of BOP

yIncrease in Efficiency


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Arguments in the Against of

Liberalization

y Pressure by IMF and World Bank

yMore depending on Foreign Debt

yDependence on Foreign technology

yUndue importance to Privatization

y Problem of Unemployment


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Documents

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