The State Of Reforms

Outlook News Desk

Updated on: 7 February 2024 7:38 pm

MAJOR STEPS SINCE 1991

Industrial licensing abolished except for a few industries

Private sector role expanded

Trade made free with a very small negative list of exports and imports

Peak tariffs brought down from 300 per cent to 50 per cent and import duty on capital goods reduced from 85 per cent to 25 per cent

Rupee made fully convertible on current account

Automatic approval granted for foreign equity participation up to 51 per cent in 36 specified high priority industry groups and 100 per cent equity permitted in core sectors like power

Restrictions on expansion of large industrial houses removed

FERA'S restrictions significantly relaxed

The Capital Issues Control Act, 1947, revoked

Indian companies permitted to access international capital markets through Euro-issues

Foreign Institutional Investors allowed to invest in Indian capital market

National Stock Exchange set up to introduce transparency through screen based trading as also to create secondary market for debt instruments

THE UNFINISHED AGENDA

Runaway fiscal deficit not contained

High interest rates continue

Consumer Price Index rise not controlled

Full convertibility of the rupee still a pipe dream

No transparent policy on transnational corporations

Depositories still not set up

New financial instruments like derivatives and options not available to investors

Absence of a vibrant debt market

Insurance sector still closed to the private sector

Infrastructure bottlenecks continue. In the absence of appropriate regulatory framework and transparent clear-cut policies, investment in infrastructure sector remain an unattractive proposition

Labour laws not suitably amended to permit closure of unviable sick units

Judicial framework, institutional and administrative structure not in tune with the reforms regime

Stranglehold of bureaucracy on commerce and industry still a problem

Plethora of permissions required to start an industry still prevalent, in spite of delicensing

PSU privatisation and disinvestment as well as opening up of oil sector incomplete

Discrimination against domestic companies by charging them higher tax rates on capital gains than the rates charged to FIIs continues

Value-added tax not introduced

Restrictions on international trade in agricultural goods continue

Agriculture not given the status of industry. Agriculture sector reforms lagging behind the overall liberalisation process adopted by the Government

Published At: 29 April 1996 12:00 am