India’s ideal (regarding socialism) is that most, or all, of the major industries are owned and operated by the government, rather than the individual. India has excessive government control and ownership within the country, which is doing the country more harm than good (as we will see later on). Government-controlled businesses accounted for around 43% of India’s capital stock, and the productivity of these entities was substantially less than that of the private ones. This low productivity in these government-owned business resulted in India’s GDP growth being reduced by 0.7% each year.
Now, India’s model, regarding autarky, seemed like more of a Utopian ideal to me. India had a strong desire to maintain independence from the West. Many people in India supported the views of the Communist Party, who were opposed to foreign investment from the West and in favor of more government control and ownership. This, inevitably, lead to tighter restrictions being imposed in the country, especially regarding investment and operations of multinational enterprise. India regarded its basic infrastructure as a very crucial element in developing the economy as a whole. They believed that these activities, …show more content…
After 1991, India shifted towards a greater reliance on the free market enterprise. Private sector firms could now compete with government-owned business. In 35 industries, FDI of up-to 51% would be eligible for automatic approval. There were also measures taken to delicense and deregulate and foreign exchange controls were relaxed to some degree. Privatization also progressed, but slowly. From 1991 to 2000, 48 firms were privatized. India had also reduced its tariffs and quotas and its restrictions on foreign investment, and achieved improvements in regulation. It was clear that states in India, like Maharashtra and Gujarat, that accepted these policies more openly pulled ahead of the other states by a
Now, India’s model, regarding autarky, seemed like more of a Utopian ideal to me. India had a strong desire to maintain independence from the West. Many people in India supported the views of the Communist Party, who were opposed to foreign investment from the West and in favor of more government control and ownership. This, inevitably, lead to tighter restrictions being imposed in the country, especially regarding investment and operations of multinational enterprise. India regarded its basic infrastructure as a very crucial element in developing the economy as a whole. They believed that these activities, …show more content…
After 1991, India shifted towards a greater reliance on the free market enterprise. Private sector firms could now compete with government-owned business. In 35 industries, FDI of up-to 51% would be eligible for automatic approval. There were also measures taken to delicense and deregulate and foreign exchange controls were relaxed to some degree. Privatization also progressed, but slowly. From 1991 to 2000, 48 firms were privatized. India had also reduced its tariffs and quotas and its restrictions on foreign investment, and achieved improvements in regulation. It was clear that states in India, like Maharashtra and Gujarat, that accepted these policies more openly pulled ahead of the other states by a