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    Cultural 2. Demographic 3. Economic 4. Natural 5. Political 6. Technological

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    Saurabh Shukla
    The political, economic, and business environment in India was reshaped by the New Economic Policy of 1991 in response to macroeconomic imbalances. The NEP-1991 involved liberalizing controls, privatizing state-run companies, and globalizing the economy. Major measures included devaluing the rupee, allowing foreign investment, dismantling licenses, opening industries to private sector participation, and reducing tariffs. Globalization helped accelerate India's economic growth and improved its global economic position.

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    Cultural 2. Demographic 3. Economic 4. Natural 5. Political 6. Technological

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    Saurabh Shukla
    16 views16 pages
    The political, economic, and business environment in India was reshaped by the New Economic Policy of 1991 in response to macroeconomic imbalances. The NEP-1991 involved liberalizing controls, privatizing state-run companies, and globalizing the economy. Major measures included devaluing the rupee, allowing foreign investment, dismantling licenses, opening industries to private sector participation, and reducing tariffs. Globalization helped accelerate India's economic growth and improved its global economic position.

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    The political, economic, and business environment in India was reshaped by the New Economic Policy of 1991 in response to macroeconomic imbalances. The NEP-1991 involved liberalizing controls, privatizing state-run companies, and globalizing the economy. Major measures included devaluing the rupee, allowing foreign investment, dismantling licenses, opening industries to private sector participation, and reducing tariffs. Globalization helped accelerate India's economic growth and improved its global economic position.

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    Download as ppt, pdf, or txt
    16 views16 pages

    Cultural 2. Demographic 3. Economic 4. Natural 5. Political 6. Technological

    Uploaded by

    Saurabh Shukla
    The political, economic, and business environment in India was reshaped by the New Economic Policy of 1991 in response to macroeconomic imbalances. The NEP-1991 involved liberalizing controls, privatizing state-run companies, and globalizing the economy. Major measures included devaluing the rupee, allowing foreign investment, dismantling licenses, opening industries to private sector participation, and reducing tariffs. Globalization helped accelerate India's economic growth and improved its global economic position.

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    of 16

    MACRO-ENVIRONMENT

    FORCES

    1. CULTURAL
    2. DEMOGRAPHIC
    3. ECONOMIC
    4. NATURAL
    5. POLITICAL
    6. TECHNOLOGICAL
    The political environment includes all
    laws,government agencies,and lobbying
    groups that influence or restrict
    individuals or organizations in the
    society.
    The political environment in an economy is
    influenced by:
    • Philosophy of political parties
    • Ideology of the party in power
    • Nature of bureaucracy
    • The political stability
    • The foreign policy
    In 1991 Indian economy faced severe
    macro-economic imbalances:
    • Huge deficit in the balance of
    payments
    • Current Account Deficit rose to 3.2%
    of GDP
    • Foreign currency assets dipped from
    US $3.4 bn (march 1990) to US $975
    mn on July 12,1991
    The New Economic Policy of 1991
    and the signing of GATT in 1993
    have reshaped the business environment in
    India.

    The salient features of the


    NEP-1991:
    Liberalisation
    Extending privatisation
    Globalisation of the economy
    LIBERALISATION
    Liberalization refers to a relaxation
    of previous government restrictions,
    usually in areas of social or
    economic policy. In some contexts
    this process or concept is often, but
    not always, referred to as
    deregulation.
    PRIVATISATION
    The process of moving from a government-
    controlled system to a privately run, for-
    profit system.
     The repurchasing of all of a company's
    outstanding stock by employees or a
    private investor. As a result of such an
    initiative, the company stops being
    publicly traded.
    GLOBALISATION
     Globalisation describes a process by which
    regional economies, societies, and cultures
    have become integrated through a global
    network of communication, transportation, and
    trade. The term is sometimes used to refer
    specifically to economic globalization: the
    integration of national economies into the
    international economy through trade, foreign
    direct investment, capital flows, migration, and
    the spread of technology.However, globalisation
    is usually recognized as being driven by a
    combination of economic, technological,
    sociocultural and political factors.
    MAJOR MEASURES AS PART OF
    THE LPG STRATEGY OF INDIA
     DEVALUATION of Indian currency by 18-
    19% against major currencies in the
    international foreign exchange market.
    This measure was taken to resolve the
    BOP crisis.
     Disinvestment:under the privatisation
    scheme,most of the public sector
    undertakings have been / are being sold to
    private sector.
     Dismantling of the industrial licensing
    regime:at present only six industries are
    under compulsory licensing mainly on
    account of environmental safety.
    •Allowing FDI across a wide spectrum of
    industries and encouraging non-debt flows.
    E g. allowing FDI up to 100% under the automatic
    route for most manufacturing activities SEZs.

    •NRI scheme: The general policy and facilities for


    FDI as available to foreign investors/companies
    are fully applicable to
    NRIs as well.
    • Throwing open Industries reserved for the public sector to
    private
    participation. Now there are only three industries reserved
    for the public sector.

    • Abolition of the MRTP Act.

    • The removal of quantitative restriction on imports.

    • The reduction of the peak customs tariff from over 300%


    to 30%.

    • Wide ranging financial sector reforms in the banking,


    capital marketing, insurance sectors, including deregulation
    of interest rates.
    Globalization in India had a
    favorable impact on the overall
    growth rate of the economy.
     Consequently India’s position in the
    global economy has improved from
    the 8th position in 1991 to 4th place
    in 2001; when GDP is calculated on
    a purchasing power parity basis.
    During 1991-92 the first year of
    Rao’s reforms program, the Indian
    economy grew by 0.9% only.
    However the GDP growth
    accelerated to 5.3 % in 1992-93,
    and 6.2% 1993- 94. A growth rate
    of above 8% was an achieved
    during the year 2003-04.
    India’s GDP growth rate can be seen from the
    following graph since independence

    India to become 3rd largest Economy by PPP in the world by 2012


    PriceWaterhouseCoopers

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