Advantages And Disadvantages Of Trade Policy

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Trade Policy Reforms: Trade Policy Reform liberalised the policy of import substitution mentioned earlier. As a result of which import license was abolished for capital goods & intermediates in 1993. Also govt. of India had adopted a flexible exchange rate in order to deal with balance of payments through exchange rate flexibility. On April 1, 2001 after 10 years the reforms started finally restrictions imports of manufactured products and agricultural products were removed (Ahluwalia*). So, abolishment of import license was the first element of the trade policy, the second element of this strategy was to reduce tariff protection. Average rate of import duty which was 72.5% in 1991-92 had been reduced to 24.6% in 1996-97. But again in next …show more content…

This has been imposed by IMF and become mandate as results of structural adjustment programmes.
Objectives: 1.To strengthen the private sectors. 2. Government to concentrate on areas like education and infrastructure. Even these days privatisation in educational sector taking place.
3. Privatize the public sector.
Privatization has some advantages – efficiency, absence of political interference, quality source and systematic marketing use of modern technologies, optimum utilization of resources. On the other hand it has disadvantages also- Exploitation of Labour, abuse of powers by executive, unequal distribution of wealth and income, lack of job security etc (www1).
The sector that showed huge successes after privatization are insurance, banking, civil aviation, telecom, power.
Globalization and its impact on economy:
The process of globalization considered as an important part of the economic reform. In general globalization means turning the whole world into a global village. Globalization has created lots of job opportunities, skilled professionals and the most important part the growth of IT sectors

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