india's transformation-case study
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1. Compare between the economic features of pre reform and post reform India.
Answer:
Pre reform and post reform India has different specific. features. The economic system that
developed in India after 1947 was a mixed economy and in 1991 the overnment of India too!the economic reform proram.
". #valuate the performance of pre reform and post reform India.
Answer:
The pre reform economic system of India which is more of a closed economic system was
incapable of deliverin the proress. In the meantime many $outheastern %sian countries had
started to en&oy their economic proress. India's ()P per capita was *+1,- less than half of
India's population could read only / million could access the telephones and only 140 of the
population had access to clean sanitation. orld 2an! estimated that some 4,0 of the world's
desperately poor lived in India.
The lac! of proress of the pre reform economic system led the Indian overnment to initiate an
ambitious economic reform proram in which state owned enterprises was privati3ed private
sector investment was encouraed in electricity eneration- oil industry- steel ma!in- air
transportation and telecommunication. Tariff was reduced from 4,,0 to only /0. Corporate tax
declined to only +0 in 1997 from 7.0. The result of this economic reform has been
impressive. The economy expanded at an annual rowth rate of about /.+0 from 1994 to ",,4-
Pre reform India1. $tate owned enterprises.". Centrali3ed plannin.+. $ubsidies by overnment.4. Constrained in the rowth of private
sector.. 5ih import duty./. )ifficult labor law.
7. %ccess to forein exchane system waslimited.
6. orein investment was restricted.9. 8ar!et price of products was
determined by the overnment.
Post reform India1. Privati3ed state owned enterprises.
Private sector rowth in electricity-steel industry- air transport andtelecommunication industry.
". )ecentrali3ed plannin.+. $ubsidies by overnment.4. Increasin rowth of private sector.
. Import duty was decreased. awmaterials and many industrial oodscould be freely imported.
/. :ew labor law was introduced.7. Increase in orein direct investment.6. orein e;uity sta!es up to 10 by
forein investors was approved.9. 8ore open mar!et economy which
determines the mar!et price throuhdemand and supply.
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and then accelerated to 90 annually durin ",,<",,6. orein investment &umped from *1,
million in 1991 to *+/.7 billion in ",,6. India's software development sector emered with sales
of *, billion in ",,7- which is about .40 of India's ()P. India's pharmaceuticals industry was
also flourished and emered as credible players on the lobal mar!etplace.
+. elate the lesson to 2anladesh.
Answer:
2anladesh followed a socialist economy by nationali3in all industries after independence it
experiences a slow rowth of producin experienced entrepreneurs- manaers- administrators-
enineers and technicians. orein exchane system was not developed enouh. 2anladeshi
people were larely illiterate- uns!illed and underemployed. %fter 197- 2anladeshi leaders
bean to turn their attention to developin new industrial capacity and rehabilitatin its economy-
the pre reform economic model resulted in inefficiency and stanation. 2einnin in the late
197- the overnment radually ave reater scope to private sector participation in the
economy. 8any state owned enterprises have been privati3ed- li!e ban!in- telecommunication-
aviation- media- and &ute. In the mid 196,'s there were encourain sin of proress. #conomic
policies aimed at encourain private enterprise and investment- privati3in public industries-
and liberali3in the import were accelerated.
2anladesh's economy is characteri3ed as poor and developin- despite several improvement
efforts at the national and international level. In ",1+- the per capita income of the country stood
at *1-,"4- while the world averae is *1,-",,. %s of ",1"- the literacy rate in the country is
about 7.7,0. The poverty rate is still very hih. orld 2an! report in =uly ",, states that the
poverty has seen a decline of ",0 since the early 199,s. 2anladesh has experienced a rowth
rate of 0 since 199,. %ccordin to the orld 2an- 2anladesh has achieved rowth of .70 in
>",,9.