What kind of economic system did India operate under during 1947 to 1990? What kind of system is it moving towards today? What are the impediments to completing this transformation? The economic system that developed in India after 1947 was a mixed economy characterized by a large number of state-owned enterprises, centralized planning and subsidies. In mixed economies, government also tend to take into state ownership troubled firms whose continued operation is thought to be vital to national interests Today, however, the economy of India is a lot more geared towards the capitalist strategy.
This basically means that it is fashioned more around money and making profit than caring for the people in the system. Because of this, more and more things are imported and no longer made locally, because more of a profit can be made by buying in. It means that Indian's role in the world has changed. It is now used by textile firms and other firms to produce cheap clothing for other markets. This is one of the impediments, that Its people are sold out and forced to work cheap labor Jobs because the system has changed; now It is solely Interested In making money.
This is a transformation that has happened worldwide and started in he west, mainly by America and closely followed by Britain and the rest of the world. And the second impediments The main impediments of the complete transformation lie In the restrictions demanded by political opposition. How might widespread public ownership of businesses and extensive government regulations have impacted (I) the efficiency of state and private businesses, and the rate of new business formation in India during the 1947-90 time frame?
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How do you think these factors affected the rate of economic growth In India during this time frame Widespread public ownership of businesses and extensive government regulation as the result of the economic system that was prevailing in India that system was incapable of delivering that kind of economic progress that many southeastern Asian nations had started to enjoy. The efficiency of the state has Impacted a lot due to that system because in 1994, Indian economy was still smaller than the Belgium despite having a population of 950$ and its GAP per capita was a paltry $310.
According to World Bank some 40% of desperately poor lived in India and only 2. 3% of the population had a household income in excess of $2484. Appreciativeness have also affected because It stunted the development of healthy private sector. SQ: How would prevarication deregulation and the removal of barriers to foreign direct investment affect the efficiency of business, new business formation and the rate of economic growth In India during the post time period?
Answer : Prevarication deregulation and the removal of barriers to foreign direct investment affect on the efficiency of business was impressive because the economy expanded at an annual rate of about 6. 3% from 1994 to 2004 and then accelerated to 9% per annum during 2005 20th. Foreign Investment In India Jumped from $150 million In 1 991 to $36. 7 billion In 2008. Due to these economic reforms the Indian private firms became 30 to 40 percent more productive than their state owned enterprises. 1 OFF pharmaceuticals.
Why do you think India is developing strength in these areas ? Answer: India is developing strength in technology industries such as software and pharmaceuticals because both two sectors are considered to be the need of the present age and also the future. With having strength in software and pharmaceuticals Indian companies can emerge as credible players on the global marketplace primarily by selling low cost, generic version of drugs that they have mom off patent in the developing world. And information technology sector of India contributes about 5. Percent of the GAP but still it must be improved for economic development. SQ: Given what is now occurring in the Indian economy, do you think the country represents an attractive target for inward investment by foreign multinationals selling consumer products? Why? The country represents an attractive target for inward investment by foreign multinationals consumer products. If the tariffs go lower the Chinese will bring their low cost products to India. This will destroy the domestic worker and India would soon lean on imports.
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