You visited us 1 times! Enjoying our articles? Unlock Full Access!

What economic changes were Initiated by the government under the Industrial policy 1991? What Impact have these changes made in business and industry?

Open in App

Liberalisation, Privatisation and Globalisation were the economic changes inhaled by the government under the industrial policy 1991.

(a) Liberalisation

The essential features of liberalisation were:

(i) It laid stress on freedom of business and industry from unnecessary controls and restrictions of the government.

(ii) Emphasis was laid on simplifying export and import procedures.

(iii) Restrictions on the movement of goods and services was removed.

(iv) Public sector enterprises were deserved.

(b) Privatisation

The essential features of privatisation were:

(i) It laid stress on induction of private ownership, management and control in public sector.

(ii) There was a significant reduction in the role of public sector enterprises for economic growth.

(iii) BIER was established for rehabilitation of sick units.

(iv) Disinvestment of public sector took place at a significant rate.

(c) Globalisation

The essential features of globalisation were :

(i) ft laid stress on integration of domestic economies into a cohesive global economy.

(ii) Licensing was abolished for imports.

(iii) The share of foreign equity participation was increased.

(iv) FMB was set up to promote foreign investments in India.

Impact of these changes on business and industry.

(i) Increasing Competition Changes in the rides of industrial licensing and entry of foreign firms, has increased the competition for Indian firms especially in service industries such as banking, communication. health, etc.

(ii) More Demanding Customers Due to an increase in competition, a wider choice of products are available in the market. As a result, customers are becoming more choosy. He is now regarded as the 'King of the market'.

(iii) Rapidly Changing Technological Environment Increased competition in market forces the firms to develop new ways to survive and grow in market Due to this. smaller firms face tough challenges for transformation In processes. technology. machines and products.

(iv) The necessity for Change Rapid change in the market. forces the enterprises to continuously modify their operations.

(v) Need for Developing Human Resource The new market conditions require people with higher competence and greater commitment. Thus. the need to develop human resource is increasing.

(vi) Market Orientation Earlier firms used to produce first and then sell goods in the market. But now, in the fast-changing world. production oriented technique has changed to market orientation, where firms study and analyse the market first and produce goods accordingly.

Suggest Corrections
Join BYJU'S Learning Program
Related Videos
Goals of Planning
Watch in App
Join BYJU'S Learning Program