"India Country Profile 2014" and "Case Study instructions (India)"

Name
Tutor
Course
Date
Case Study: India’s Economy
Privatization
As indicated in the article and the India Country profile, India has a mixed economy, with both the public and private sectors performing different activities according to the available regulations (India Case Study 1). Prior to the enactment of the New Industrial Policy in 1991, the economy of India was growing at a very low rate due to incompetence and inefficiencies found in the public sector. Since 1991, various state-owned organizations have been transferred to the private owners with the aim of improving the economic status of India (International Financial Corporation 5). For instance, unlike in the past, individuals and private groups can now own companies such as steelmaking, telecommunication, oil companies, and electricity production companies, among others. In addition, foreign investors have been allowed to operate in India and in some special instances, they can obtain 100% ownership (India Case Study 1). Privatization in India has realized significant success as signified by the improved economic growth since 1994. Also, the foreign investment has tremendously increased, which is a clear indication that foreign companies are now more confident with the Indian economy and are ready to invest in the country (India Case Study 1).
Deregulation
Before the introduction of economic reforms in 1991, strict regulations concerning private ownership of enterprises and foreign investments hindered the economic progress in India (India Case Study 1). For instance, obtaining a license to own a private company was a tedious process and took several years. The laws governing income tax and import tariffs were highly stringent. In addition, labor laws made it difficult for companies to fire the employees. However, after 1991, such trends changed massively, and new regulations were adopted in sectors such as industrial licensing. The process to own private companies was greatly shortened, and import tariffs were made less strict, allowing goods and raw materials to be freely imported from other countries (International Financial Corporation 8). Moreover, the income tax was immensely reduced, a move that l...