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Pimpri Chinchwad Education Trust's S. B. PATIL INSTITUTE OF MANAGEMENT Sixth National Conference On “ECONOMIC REFORMS IN INDIA- TRUTHS AND MYTHS” 19thand 20thJanuary 2018 CONFERENCE PROCEEDINGS In association with SAVITRIBAI PHULE PUNE UNIVERSITY Under QIP Programme Chairman Chief Convener Convener Sixth National Conference Sixth National Conference Sixth National Conference Dr. Daniel Penkar Dr. Hansraj Thorat Dr. Kirti Dharwadkar Director, SBPIM Head Research, SBPIM Head Academics, SBPIM Pimpri Chinchwad Education Trust's S. B. PATIL INSTITUTE OF MANAGEMENT Sector -26, Pradhikaran, Nigdi, Pune - 411044 (India) Our Tribute Late Shri. Shankarrao Bajirao Patil Late Smi. Lilatai S. Patil (Founder, PCET) (Ex. Chairperson, PCET) Board of Trustees Shri. Dnyaneshwar P. Landge Smt. Padmatai M. Bhonsale Shri. Vitthalrao S. Kalbhor (Chairman) (Vice -Chairperson) (Secretary) Shri. Shantaram D. Garade Shri. Harshvardhan S. Patil Shri. Bhaijaan Kazi (Treasurer) (Trustee) (Trustee) Pimpri Chinchwad Education Trust’s S. B. PATIL INSTITUTE OF MANAGEMENT Sixth National Conference On 19thand 20thJanuary 2018 CONFERENCE PROCEEDINGS In association with SAVITRIBAI PHULE PUNE UNIVERSITY Under QIP Programme Chairman Chief Convener Convener Sixth National Conference Sixth National Conference Sixth National Conference Dr. Daniel Penkar Dr. Hansraj Thorat Dr. Kirti Dharwadkar Director, SBPIM Head Research, SBPIM Head Academics, SBPIM Edition: 2018 Pimpri Chinchwad Education Trust’s S. B. Patil Institute of Management Sector-26, Pradhikaran, Nigdi, Pune-411044 National Conference: 2018 ‘ECONOMIC REFORMS IN INDIA-TRUTHS AND MYTHS’ Conference Proceedings ISBN: 978-81-922746-8-3 Copy Rights © 2018, by S. B. Patil Institute of Management, Nigdi, Pune All right reserved with the publisher including the right to translate, reproduce this book or parts thereof except for brief quotations in critical articles or review. Disclaimer The views expressed in the paper or article are the individual authors, neither S. B. Patil Institute of Management nor the editor accepts any responsibility for the errors, or views expressed in the paper or article. Errors, if any, are purely unintentional and readers are expressed to communicate such errors to avoid discrepancies in future Published by Pimpri Chinchwad Education Trust’s S. B. Patil Institute of Management Sector-26, Pradhikaran, Nigdi, Pune-411044 Chief Editor Dr. Hansraj Thorat Editors: Dr. Padmalochana Bisoyi Dr. Bhushan Pardeshi Mr. Anishkumar Karia Printed by: Success Publications Radha Krishna Apartment, 535, Shaniwar Peth, Opp. Prabhat Theater,Pune-411030 Contact-9422025610, 8806664858, 020-24434662 [email protected] Website- www.sharpmultinational.com CHAIRMAN’S MESSAGE “There is a need for financial reform along ethical lines that would produce in its turn an economic reform to benefit everyone. This would nevertheless require a courageous change of attitude on the part of political leaders”.Pope Francis There is no stopping for self-deluded middle class, pro-marketchange by reforms which entered into 25 years economic revolution. It is believe India in July 1991, India broke free from the shackles of the socialist economy, and that the light of free economy shattered the darkness of the four decades of socialism. We have believed that we indeed left behind in the Stone, Bronze and Iron ages. The decision of reform in India to boost the foreign exchange position,the balance of payments position, which was already under severe strain, was further exacerbated by the Gulf crisis, the direct adverse impact. The balance of payments situation has become critical as the flow of funds from international capital markets did not materialize as anticipated though several countries did offer help.” India has opened the doors for “Venture Capital Companies to invest in new companies in anticipation of future-capital gains.” India has one of the largest pools of scientific and technical manpower,yet many of our young and new entrepreneurs find it difficult to raise capital because of the risk involved. The focus of government for Poverty alleviation was the central priority of the Indira Gandhi and Rajiv Gandhi governments. More investments were made in poverty alleviation schemes than ever before. Several new schemes were implemented. Post LPG India’s Industrial Growth achieved a record increase, touching 12% per annum at its height. This was the result of the major policy initiatives taken during the Seventh Five Year Plan aimed at increasing productivity, reducing costs and improving quality. The accent was on opening the domestic market to increased competition and readying our industry to stand on its own in the face of international competition.” The public sector was opened of a number of bureaucratic hurdles and given a large measure of autonomy than ever before. The technological and managerial modernization of industry was pursued as the key instrument for increasing productivity and improving our competitiveness in the world. It was a period of visualizing new horizons. Dr. Daniel Penkar Director, SBPIM CHIEF CONVENER’S MESSAGE “We will be remembered only if we give to our younger generation a prosperous and safe India, resulting out of economic prosperity coupled with civilizational heritage”. A. P. J. Abdul Kalam July 1991 is widely seen as a watershed month in Indian economic policymaking. When the Indian government declared that it was unwinding the interventionist regime which had been in place since Independence, involving controls on economic agents, regulation of markets, a large public sector and plan as to how economic resources should be allocated. In the coming period to follow, it was then promoted interventionist framework to completely dismantle and establish and support a system driven by private initiative and relatively unfettered markets, with minimal regulation and control. The state was to transform itself from being a regulator of the market economy to being a facilitator of the functioning of the market mechanism. This transition has extreme importance from growth point of view; however, there was a reason why post-Independence India, steeped in poverty, made the choice of pursuing development within a highly regulated mixed economy. Twenty-five years is a long period in history. The liberalization has changed the front face of Indian economy in which the first is economic growth. India, it is argued, has not merely managed to escape from the low-growth trap it was caught in until the 1980s but has managed to sustain and improve on that growth rate. Although the rate of growth seems to have stabilized at a slightly lower level subsequently, that issue is mired in controversy. But even leaving that aside, the figures do show a definite improvement in the last 25 years compared with the post-Independence period prior to that. Substantially the policy changes that began in the 1980s and were pursued more intensively after 1991 helped India escape the low “Rate of growth” in which it had been trapped until then. This achievement by referring to persisting poverty and deprivation is, unwarranted because only with surpluses resources are found to be sufficient to address these problems. It is growth that would offer a sustainable solution to these basic problems. Another successful outcome of reform is India’s large foreign exchange reserves. That a country which had seen its reserves fall to the equivalent of the value of its imports over two weeks in 1991 and had to pledge its gold reserves to obtain temporary balance of payments financing from the International Monetary Fund (IMF) has recorded this turnaround is seen as remarkable. The liberalization has accelerated growth. So many positive signs can be listed due to reforms in India. Dr. Hansraj Thorat Head Research, SBPIM CONVENER’S MESSAGE “Empowering the individual means empowering the nation. And empowerment is best served through rapid economic growth with rapid social change”. Atal Bihari Vajpayee India’s remarkable economic growth in the last three decades has made it one of the fastest growing economies in the world. While India’s economic growth has been impressive, rapid growth has been accompanied by a slow decline in poverty, persistently high inflation, jobless growth, widening regional disparities, continuing socio-political instability, and vulnerability to balance of payment crises. India’s growth has been as unbalanced both across states and between urban and rural areas. The spread of growth results are not uniform as it has not reached the bottom 20 %. Regionally, the disparities of incomes within and between states have both been increasing. At the district level, however, the gap is much larger. The fact that differences within India are comparable to cross-country differences is remarkable given that there are no political barriers to migration, approximately free trade, and a common set of federal institutions, policies, and governance. The growing regional disparities have dampened political resolve for further economic reforms that might further enlarge regional inequalities. The service sector is the largest sector in a country at a low level of development. During the course of development, most economies undergo substantial changes with large shifts in resources across the agricultural, manufacturing, and service sectors. In the context of the developing process, India stands out because India’s service sector currently is close to 60% of the economy. In spite of a large increase