Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

2003 changing profile of indian economy-b.v.raghunandan

813 views

Published on

Published in: Economy & Finance, Business
  • Login to see the comments

2003 changing profile of indian economy-b.v.raghunandan

  1. 1. Changing Profile of Indian Economy - B.V.Raghunandan, SVS College, Bantwal Cauvery College, Virajpet August 13, 2011
  2. 2. Preliberalisation Indian Business <ul><li>Disbelief of private sector </li></ul><ul><li>Bureaucratised public sector </li></ul><ul><li>Politicised co-operative sector </li></ul><ul><li>Unviable agriculture sector </li></ul><ul><li>Lack of availability of finance </li></ul><ul><li>Finance sector was in Jurassic park period </li></ul><ul><li>No FII investment </li></ul><ul><li>High taxation regime </li></ul>
  3. 3. A Blotch in Economic History <ul><li>Stagnation in the economy </li></ul><ul><li>Supply-side Inflation </li></ul><ul><li>No foreign exchange reserve </li></ul><ul><li>Political crisis </li></ul><ul><li>RBI had to pledge its gold reserves with Bank of England for foreign exchange accommodation </li></ul><ul><li>Second Big Wave of Liberalisation </li></ul>
  4. 4. Liberalised Business <ul><li>In the beginning, a madness of Americanisation </li></ul><ul><li>Amartya Sen’s Social Network </li></ul><ul><li>C.K.Prahlad’s Bottom of the Pyramid Approach to Business </li></ul><ul><li>Mohammad Yunus of Bangla Desh Grameena Bank getting Nobel Prize </li></ul><ul><li>Exposure of the US double standard in WTO negotiations </li></ul>
  5. 5. Impact of Liberalisation <ul><li>Finance sector reforms </li></ul><ul><li>Telecom Revolution </li></ul><ul><li>Tax Reforms </li></ul><ul><li>Opening up Insurance Sector </li></ul><ul><li>Disinvestment </li></ul><ul><li>Infrastructure </li></ul><ul><li>E’Governance </li></ul><ul><li>Right to Information Act </li></ul><ul><li>CCI </li></ul><ul><li>Energy sector reforms </li></ul><ul><li>Corporate Governance </li></ul><ul><li>Inclusive Development </li></ul><ul><li>Banking Sector Reforms </li></ul><ul><li>Changes in Company Law </li></ul>
  6. 6. Finance Sector Reforms <ul><li>Stock Exchange Reforms </li></ul><ul><li>Statutory Powers to SEBI </li></ul><ul><li>Mutual Funds </li></ul><ul><li>Venture Capital & Private Equity </li></ul><ul><li>FII Inflow </li></ul><ul><li>Commodities Exchanges </li></ul><ul><li>FEMA </li></ul>
  7. 7. Telecom Revolution <ul><li>Started in 1985 with the establishment of C-DOT </li></ul><ul><li>Opening up to private sector </li></ul><ul><li>Mobile telephony & Chinese Equipments </li></ul><ul><li>Revenue to the government shooting up with spectrum sale </li></ul><ul><li>Expansion of broadband services </li></ul><ul><li>Entertainment, education and communication </li></ul>
  8. 8. Tax Reforms <ul><li>Kelkar Committee Report </li></ul><ul><li>Reduction of tax rates progressively </li></ul><ul><li>Increase in exemption limits </li></ul><ul><li>Capital gains tax and taxability of dividend </li></ul><ul><li>Gender based exemption limit </li></ul><ul><li>Direct tax code </li></ul><ul><li>Simplification of procedure </li></ul><ul><li>Summary assessment </li></ul>
  9. 9. Opening up Insurance Sector <ul><li>IRDA given statutory powers in 1999 </li></ul><ul><li>Private insurance companies with foreign collaborators </li></ul><ul><li>Insurance companies taking stakes in Indian banks </li></ul><ul><li>Bancassurance </li></ul><ul><li>Subscribing to perpetual bonds issued by banks </li></ul>
  10. 10. Disinvestment <ul><li>More a revenue making exercise </li></ul><ul><li>PSUs used their size and monopoly </li></ul><ul><li>Listing made the PSUs to function like private sector </li></ul><ul><li>Converted Indian stock market to be a symbol of socialism </li></ul><ul><li>More autonomy to the PSUs </li></ul>
  11. 11. Infrastructure Development <ul><li>Private participation is encouraged </li></ul><ul><li>Private airports are allowed </li></ul><ul><li>Private ports are allowed </li></ul><ul><li>Toll Road concept has been revived </li></ul><ul><li>Private-public partnership </li></ul><ul><li>Led to the growth and development of housing and real estate development </li></ul><ul><li>More real estate developers tap the market for funding </li></ul>
  12. 12. E’Governance-RTI <ul><li>IT initiative by the governments in their working </li></ul><ul><li>IT companies and ITES companies take the initiative </li></ul><ul><li>Corruption is coming down </li></ul><ul><li>Litigation level is also coming down </li></ul><ul><li>Speed and efficiency in government work </li></ul>
  13. 13. Competition Commission of India <ul><li>Replacement for MRTP </li></ul><ul><li>Controversies have bogged down </li></ul><ul><li>Too much reliance on government funding </li></ul><ul><li>Sluggish in its working </li></ul><ul><li>A very inefficient new-age regulatory body </li></ul><ul><li>Probably designed to be inefficient to allow M & A activity both internally and externally </li></ul>
  14. 14. Energy Sector Reforms <ul><li>Private participation in exploration, marketing and distribution-NELP </li></ul><ul><li>Indian companies are allowed to buy mines abroad </li></ul><ul><li>Many construction companies went into generation of electricity </li></ul><ul><li>Electricity trading exchange is also established </li></ul>
  15. 15. Corporate Governance <ul><li>Following Cadbury Committee recommendations in UK, the concept hass gained currency </li></ul><ul><li>In India, limited to protecting the interest of the investors </li></ul><ul><li>Confined to listed companies through a clause in Listing Agreement </li></ul>
  16. 16. Inclusive Development <ul><li>Rural finance and banking is emphasised </li></ul><ul><li>Corporates are looking at rural markets as a business strategy </li></ul><ul><li>Development through self-help groups is gaining momentum </li></ul><ul><li>Better funding for local bodies </li></ul><ul><li>Rural development officer </li></ul><ul><li>Micro-finance </li></ul>
  17. 17. Changes in Company Law <ul><li>A new companies bill is awaiting Parliament approval </li></ul><ul><li>Producer Companies </li></ul><ul><li>Limited Liability Companies </li></ul>
  18. 18. Producer Companies <ul><li>Combining the advantages of co-operative and corporate forms of organisation </li></ul><ul><li>Registered under Companies Act </li></ul><ul><li>Minimum number is 10 </li></ul><ul><li>Democratic voting principle </li></ul><ul><li>Meant for co-operatives having footprints in many states like IFFCO </li></ul>
  19. 19. Limited Liability Partnership <ul><li>Limited Liability Partnership is a body corporate & is a separate legal entity. </li></ul><ul><li>Special type of partnership wherein liabilities of partners are limited. </li></ul><ul><li>From March 31, 2009, the Limited Liability Partnership Act, 2008 came into force to basically visualise & give opportunities mainly to service sector including I.T, Accountancy & Law </li></ul><ul><li>The disadvantages of company & partnership form of organisation led to LLPs </li></ul>
  20. 20. Banking Sector Reforms <ul><li>IT Initiative by RBI </li></ul><ul><li>Restructuring IIB and converting it into Indian Institute of Banking and Finance </li></ul><ul><li>Establishment of IDRBT in 1996 </li></ul><ul><li>Financial sector reforms put pressure on Indian banks </li></ul><ul><li>Core Banking Solutions </li></ul><ul><li>Reverse merger of ICICI in 2003 </li></ul>
  21. 21. Problems of Banking Industry <ul><li>Taking forward the IT initiative </li></ul><ul><li>HR problems </li></ul><ul><li>Cleaning up the operations </li></ul><ul><li>Credit Rating </li></ul><ul><li>Balance Sheet Planning </li></ul><ul><li>Influence of insurance companies </li></ul><ul><li>Management of liquidity </li></ul>
  22. 22. Future of Banking <ul><li>More exposure to financial services </li></ul><ul><li>Distribution of mutual fund products </li></ul><ul><li>Distribution of insurance products </li></ul><ul><li>Distribution channel for government development programmes </li></ul><ul><li>More participation in micro-finance </li></ul><ul><li>Database for the information agencies with the compliance of KYC norms </li></ul>
  23. 23. THANK YOU

×