Essay Title: 

THE CHANGING POLITICAL ECONOMY OF INDIA.

March 24, 2016 | Author: | Posted in political science, social sciences

THE CHANGING POLITICAL ECONOMY OF INDIA

From 1947 – 1990 India had a much closed system of economy . Most of the core industries were controlled by the central government and there were no real competitors . A policy of import substitution in the decades after independence encouraged the development of a broad industrial base , but a lack of competition contributed to poor product quality and inefficiencies in production . During this period India had high restrictions on the FDI (Foreign Direct Investment . For those players who wanted to invest , there were too many bureaucratic levels [banner_entry_middle]

in the Indian political system which has resulted in delays in getting the necessary approvals . For those companies that were able to establish the product lines in India , the true value of the commodities could not be realized as the prices of the commodities were controlled . Though there was improvement in the infrastructure , it was never adequate to serve the ever growing large population . Because the restrictions on the FDI and inadequate funds , development in sectors like transportation and power was slow . Multinational companies operating in India must overcome erratic electricity supplies , poor roads and gridlocked seaports and airports while contending with government policies that discourage hiring and hold back domestic demand for goods in many sectors . The predominance of inefficient state-owned enterprises , particularly in the banking sector , remains a brake on further growth

Since 1990 , there were radical changes to the Indian economic system . The economic reforms that started driving the early 1990s have started transforming the Indian economy into an open system of economy . There has been a gradual liberalization of the Public Sector Units . Most of the restrictions on FDI were removed . There were many SEZ (Special Economic Zones ) set up across the country to encourage investment in private sector . Government has relaxed limits on foreign investment across most industries . It has also given an opportunity for the big home grown companies to move beyond India . Relaxation of Foreign-exchange controls resulted in multinational companies to be able to invest more freely in India . India is the second fastest growing economy of the world at present

The strong emergence of private sector in the Indian economy has heightened the pace of development of the pharmaceutical industry in India . The pharmaceutical industry has achieved global recognition as a producer of low cost high quality bulk drugs and formulations . The recent regulatory and much awaited patent laws changes have lead the Indian pharmaceutical industry towards exploring newer avenues of drug development , thus , promising higher capital investment in the pharmaceutical industry in the near future . The Indian pharmaceutical research is backed by strong government support and availability of surplus skilled technical workers . Some of the Indian companies have gone global with presence in 60 countries , including USA , Europe and China . India is one of the top ten producers of bulk drugs in the world and 60 of India ‘s bulk drugs production is exported . The Indian economy ‘s growth rate has averaged above 7 over the past three years… [banner_entry_footer]

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