CHANGES IN BUSINESS ENVIRONMENT
DURING RAJIV GANDHI PERIOD
Acknowledgement
The project “Changes in Rajiv Gandhi Era” is a result of co-operation, hard work and good wishes of many people. We would like to thank our project guide, for her involvement and timely assessment which provided inspiration and her valued guidance throughout our study on this subject. We are also thankful to all seen and unseen hand and heads which helped in direct and indirect completion of the project.
INTRODUCTION
? Rajiv Gandhi took over as India’s Prime minister in 1984.
? Policy liberalization began to be introduced around the
beginning of the 1980’s
OBJECTIVES OF LIBERALISATION
? Speeding up Industrial development
? Better capacity utilization
? Achieving economic scale
? Reducing procedural blockages
? Development of backward areas
? more of exports & less of Imports
? Increasing competition
MEASURES TO FULFILL THE OBJECTIVES
? Delicensing of a no. of Industries
? Broad banding ? Facility for re endorsement of higher capacity of
production. ? Increase of list of industries open to large house & foreign concern &other policy relaxation in respect to MRTP & FERA companies. ? Increase in Investment limit for exemption from licensing.
? Increase in investment limit for small scale units.
? More importance to the industrialization of backward area. ? More importance to the industries with export capacity ? Liberalization of import policies. ? Liberalization of foreign collaboration.
? REDUCTION IN PRICE CONTROLS & REDUCED
CORPORATE TAXES
? In order to encourage industrialization
? FISCAL DEFICIT INCREASED
? By financing it through borrowing and deficit finance
? DECLINE IN FOREIGN EXCHANGE
? Due to slow down in exports
? ECONOMIC CRISIS OCCURRED IN 1991
? Gulf war and soviet union collision increased oil prices. ? Reforms did away the license raj and ended many public
monopolies.
NEW INDUSTRIAL POLICY 24th July 1991
Objectives of NIP
? Integrate Indian economy to world economy
? Maintain a sustained growth in productivity
? Development of indigenous technology ? Enhanced support to small scale sector ? Protect interest of labour ? Abolish the monopoly
Objectives
? Build on gains which are already made ? Development of backward areas ? Better running of public sector
? Removal of regulatory system
? Increase competitiveness ? Gainful employment
MEASURES TAKEN TO FULFILL OBJECTIVES
MEASURES
? DELICENSING ?
Still 6 industries requires license namely alcohol, drugs and pharmaceuticals, industrial explosives, defense products, etc.
? DERESERVATION OF PUBLIC SECTOR
? They were made open to private sector ? 3 industry still acquiring license atomic energy,
railways, specified minerals.
? DISINVESTMENT OF PUBLIC SECTOR
? Sold to private sector or individuals.
?Liberalization of Industrial Location ? ?
No need to take approval Locate industries in areas other than cities of more than population of 1 million.
?Abolition of phased manufacturing
programmes ? This policy removed such programme in future due to liberalized import policy and due to devaluation of rupee.
?Changes in Monopolistic and Restrictive
Trade Practices Act ? The Industrial policy, abolished the limit of Rs.100 crores for MRTP firms
?Removal Mandatory conversion clause ? The banks and financial institutions have
the option to convert the loans into equity
?Autonomy to public sector units
? Self-Government in decision making ? Signing Memorandum of Understanding
WTO
? WTO stands for World Trade Organization.
? It was established on 1st January 1995.
? India is one of the founder of WTO. ? WTO is the replacement of GATT (The General
Agreement on Tariffs & Trade),which was set up in 1948. ? GATT was set up with a single objective of creating a global environment of free trade. ? Eight rounds of trade negotiations of the GATT were held at different locations around the world. ? But it failed to bring about changes in the barriers to free trade.
? The failure of 8th round of GATT held in Uruguay
?
?
?
? ?
known as “Uruguay Round” gave birth to new Organization & a legal entity called WTO. WTO is a more powerful body than the GATT. WTO is wider than GATT. The basic aim of WTO is to strengthen the world economy &lead to more trade, investment, employment & income growth throughout the world. The number of members in WTO is 148. GATT is a legal agreement whereas WTO is a permanent Organization having legal status.
Objectives of WTO
1.
2.
3.
4.
5.
To help to remove or reduce barriers to international trade in agreement with the other countries. Optimum utilization of resources to achieve global economic development. To follow a non-discriminatory policy. Raising the standard of living of the member nation who are less developed or in developing zone. It also aims at providing employment opportunities to the members.
Globalisation
Definition
? Globalization may be defined as the process of
integrating a country’s economy , with a view to take the benefit of the global opportunities for the country’s growth and development.
FEATURES OF GLOBALISATION
? Large Scale Production And Marketing:
? When business is conducted on a global level, production
and marketing activities are conducted on a large scale to fulfill the needs of local market and also the world market.
? Interlinking of economies of countries: ? Globalization helps in connecting the economies of
different countries this helps in forming a network of work markets. ? Resources available in various countries are also connected together for producing good quality goods at lower price.
FEATURES OF GLOBALISATION
? Benefits To Participating Countries: ? The benefits are shared by the countries in an unequal proportion. ? The benefits of globalization are more to developed countries than developing countries. ? The underdeveloped or poor countries also benefit from globalization ? They can improve technology ,inflow of capital,etc.,helps the country to become developed country.
FEATURES OF GLOBALISATION
? COMPETITION: ? In global business , there is competition between various countries and business units. ? These countries may be developed or underdeveloped. ? The technology used by developed countries are better than the developing countries. ? A nation can benefit from global business by increasing its competitive capacity relating to quality of goods and so on.
EXAMPLES
? The best examples are cars and computers. Some
Toyota cars are made in Japan. Others are made in the U. S.
? The same goes for Dell computers.
Some parts of computers such as hard drives are fabricated in Korea or India. They are then assembled in the U.S.
? Domination of multi-national co. and developed
countries.
? Transfer of capital and Technology.
? Acquisitions and Mergers.
? International Restrictions.
? Trading blocks.
? Interdependence of countries. ? Participation of global agencies.
doc_788199982.pptx
DURING RAJIV GANDHI PERIOD
Acknowledgement
The project “Changes in Rajiv Gandhi Era” is a result of co-operation, hard work and good wishes of many people. We would like to thank our project guide, for her involvement and timely assessment which provided inspiration and her valued guidance throughout our study on this subject. We are also thankful to all seen and unseen hand and heads which helped in direct and indirect completion of the project.
INTRODUCTION
? Rajiv Gandhi took over as India’s Prime minister in 1984.
? Policy liberalization began to be introduced around the
beginning of the 1980’s
OBJECTIVES OF LIBERALISATION
? Speeding up Industrial development
? Better capacity utilization
? Achieving economic scale
? Reducing procedural blockages
? Development of backward areas
? more of exports & less of Imports
? Increasing competition
MEASURES TO FULFILL THE OBJECTIVES
? Delicensing of a no. of Industries
? Broad banding ? Facility for re endorsement of higher capacity of
production. ? Increase of list of industries open to large house & foreign concern &other policy relaxation in respect to MRTP & FERA companies. ? Increase in Investment limit for exemption from licensing.
? Increase in investment limit for small scale units.
? More importance to the industrialization of backward area. ? More importance to the industries with export capacity ? Liberalization of import policies. ? Liberalization of foreign collaboration.
? REDUCTION IN PRICE CONTROLS & REDUCED
CORPORATE TAXES
? In order to encourage industrialization
? FISCAL DEFICIT INCREASED
? By financing it through borrowing and deficit finance
? DECLINE IN FOREIGN EXCHANGE
? Due to slow down in exports
? ECONOMIC CRISIS OCCURRED IN 1991
? Gulf war and soviet union collision increased oil prices. ? Reforms did away the license raj and ended many public
monopolies.
NEW INDUSTRIAL POLICY 24th July 1991
Objectives of NIP
? Integrate Indian economy to world economy
? Maintain a sustained growth in productivity
? Development of indigenous technology ? Enhanced support to small scale sector ? Protect interest of labour ? Abolish the monopoly
Objectives
? Build on gains which are already made ? Development of backward areas ? Better running of public sector
? Removal of regulatory system
? Increase competitiveness ? Gainful employment
MEASURES TAKEN TO FULFILL OBJECTIVES
MEASURES
? DELICENSING ?
Still 6 industries requires license namely alcohol, drugs and pharmaceuticals, industrial explosives, defense products, etc.
? DERESERVATION OF PUBLIC SECTOR
? They were made open to private sector ? 3 industry still acquiring license atomic energy,
railways, specified minerals.
? DISINVESTMENT OF PUBLIC SECTOR
? Sold to private sector or individuals.
?Liberalization of Industrial Location ? ?
No need to take approval Locate industries in areas other than cities of more than population of 1 million.
?Abolition of phased manufacturing
programmes ? This policy removed such programme in future due to liberalized import policy and due to devaluation of rupee.
?Changes in Monopolistic and Restrictive
Trade Practices Act ? The Industrial policy, abolished the limit of Rs.100 crores for MRTP firms
?Removal Mandatory conversion clause ? The banks and financial institutions have
the option to convert the loans into equity
?Autonomy to public sector units
? Self-Government in decision making ? Signing Memorandum of Understanding
WTO
? WTO stands for World Trade Organization.
? It was established on 1st January 1995.
? India is one of the founder of WTO. ? WTO is the replacement of GATT (The General
Agreement on Tariffs & Trade),which was set up in 1948. ? GATT was set up with a single objective of creating a global environment of free trade. ? Eight rounds of trade negotiations of the GATT were held at different locations around the world. ? But it failed to bring about changes in the barriers to free trade.
? The failure of 8th round of GATT held in Uruguay
?
?
?
? ?
known as “Uruguay Round” gave birth to new Organization & a legal entity called WTO. WTO is a more powerful body than the GATT. WTO is wider than GATT. The basic aim of WTO is to strengthen the world economy &lead to more trade, investment, employment & income growth throughout the world. The number of members in WTO is 148. GATT is a legal agreement whereas WTO is a permanent Organization having legal status.
Objectives of WTO
1.
2.
3.
4.
5.
To help to remove or reduce barriers to international trade in agreement with the other countries. Optimum utilization of resources to achieve global economic development. To follow a non-discriminatory policy. Raising the standard of living of the member nation who are less developed or in developing zone. It also aims at providing employment opportunities to the members.
Globalisation
Definition
? Globalization may be defined as the process of
integrating a country’s economy , with a view to take the benefit of the global opportunities for the country’s growth and development.
FEATURES OF GLOBALISATION
? Large Scale Production And Marketing:
? When business is conducted on a global level, production
and marketing activities are conducted on a large scale to fulfill the needs of local market and also the world market.
? Interlinking of economies of countries: ? Globalization helps in connecting the economies of
different countries this helps in forming a network of work markets. ? Resources available in various countries are also connected together for producing good quality goods at lower price.
FEATURES OF GLOBALISATION
? Benefits To Participating Countries: ? The benefits are shared by the countries in an unequal proportion. ? The benefits of globalization are more to developed countries than developing countries. ? The underdeveloped or poor countries also benefit from globalization ? They can improve technology ,inflow of capital,etc.,helps the country to become developed country.
FEATURES OF GLOBALISATION
? COMPETITION: ? In global business , there is competition between various countries and business units. ? These countries may be developed or underdeveloped. ? The technology used by developed countries are better than the developing countries. ? A nation can benefit from global business by increasing its competitive capacity relating to quality of goods and so on.
EXAMPLES
? The best examples are cars and computers. Some
Toyota cars are made in Japan. Others are made in the U. S.
? The same goes for Dell computers.
Some parts of computers such as hard drives are fabricated in Korea or India. They are then assembled in the U.S.
? Domination of multi-national co. and developed
countries.
? Transfer of capital and Technology.
? Acquisitions and Mergers.
? International Restrictions.
? Trading blocks.
? Interdependence of countries. ? Participation of global agencies.
doc_788199982.pptx