BB0029 - ECONOMIC REFORMS PROCESS IN INDIA

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ASSIGNMENT

DRIVE	SUMMER 2016
PROGRAM	BBA
SUBJECT CODE & NAME	BB0029 - ECONOMIC REFORMS PROCESS IN INDIA
SEMESTER	6
BK ID	B0188
CREDITS	4
MARKS	60

Note: Answer all questions. Kindly note that answers for 10 marks questions should be approximately of 400 words. Each question is followed by evaluation scheme.

Q. 1 Explain privatization through disinvestment in India.

Ans : Disinvestment  Definition:-

Disinvestment involves the sale of equity and bond capital invested by the government in PSUs through securitization. Disinvestment can also be defined as the action of an organisation (or government) selling or liquidating an asset or subsidiary. It is also referred to as ‘divestment’ or ‘divestiture.’ Securitization is a structured financial process which involves pooling and repackaging of cash flow producing assets into securities that are then sold to investors. The government and not the PSU’s receive money from disinvestment. The

Q. 2 Briefly discuss the reforms in the banking sector during 1992-2001

Ans : Various reforms are:-

1.Reduced CRR and SLR :

The Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) are gradually reduced during the economic reforms period in India. By Law in India the CRR remains between 3-15% of the Net Demand and Time Liabilities. It is reduced from the earlier high level of 15% plus incremental CRR of 10% to current 4% level. Similarly, the SLR Is also reduced from early 38.5% to current minimum of 25% level. This has left more loan able funds with commercial banks, solving the liquidity problem.

Q.3 Discuss the impact of convertibility both in current account and capital account.

Ans : Explanation of impact of convertibility in current account:-

current account convertibility means that any company that wants to conduct business with outside companies (like TCS, Infy etc.) can convert the dollar payment into Rupee payment or pay in terms of dollar itself. This is fully allowed in India provided that initial permission is taken from RBI. There is no need to take again and again permission from RBI permission for every transaction. Current account includes all transactions, which give rise to or use of

Q. 4 Write notes on VAT, MODVAT and Service Tax.

Ans : Explanation of Vat:-

The basic principles of VAT are contained in this document. It indicates how VAT works and with whom the responsibility for payment lies.

VAT is a tax on consumer spending. It is collected by VAT-registered traders on their supplies of goods and services effected within the State, for consideration, to their customers. Generally, each such trader in the chain of supply from manufacturer through to retailer charges VAT on his or her sales and is entitled to deduct from this amount the VAT paid on his or her purchases.

The effect of offsetting VAT on purchases against VAT on

Q. 5 Do you think poverty can be reduced through policies of inclusive growth? Justify

Ans : Yes poverty can be reduced through inclusive growth.

Justification:-

By definition, inclusive growth entails the equitable allocation of resources in order to generate benefits that can be incurred by all sectors of the society, thus alleviating poverty and inequality. Inclusive growth entails the equitable allocation of resources in order to generate benefits that can be incurred by all sectors of the society, thus alleviating poverty and inequality. However, is inclusive growth necessarily pro-poor? And does it ensure reducing the troubles of the most disadvantaged while benefiting everyone? There is yet no clear coherent measure to combine all the dimensions of inclusive growth that involves how the elements of

Q. 6 Has the FDI flows in the current times helped India? Elaborate

Ans : Yes FDI flows in current times helped India

Explanation:-

FDI inflows to India witnessed significant moderation in 2010-11 while other EMEs in Asia and Latin America received large inflows. This had raised concerns in the wake of widening current account deficit in India beyond the perceived sustainable level of 3.0 per cent of GDP during April-December 2010. This also assumes significance as FDI is generally known to be the most stable component of capital flows needed to finance the current account

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