crisis of june 1991

67 %
33 %
Information about crisis of june 1991

Published on February 17, 2009

Author: anantkrazzy


The crisis of June 1991 : The crisis of June 1991 Major characteristics of the crisis situation in 1991-92 : Major characteristics of the crisis situation in 1991-92 Slide 3: There was a serious fiscal crisis in which fiscal deficit reached the level of 6.6% of GDP. Internal debts rose to about 50% of GDP with interest payments draining about 39% of total revenue collections of the central government. GNP growth rate fell to 1.4% from the peak level of 10.5% in 1988-89. Slide 4: Negative growth rates Agriculture promotion: -2.8%. Food grain production:-5.3%. Industrial production:-0.1%. Inflation rate based both on WPI & CPI soared high at 13-14%. Slide 5: Foreign trade shrunk imports falling by 19.4% & exports by 1.5%. Rupee depreciated by 26.7% vis-à-vis US dollars. Fall in foreign exchange reserves. Confidence of the international financial institutions was badly shaken. In may 1991, the government had to lease 20 tons of gold out of its stock to the SBI to enable it to sell the gold with repurchase option after 6 months. In addition RBI was allowed to pledge 47 tons of gold to the BOE to raise a loan of $600mn. Major steps taken to manage the crisis : Major steps taken to manage the crisis Slide 7: Fiscal correction aimed at reducing fiscal deficit by about Rs 7700 core in 1991-92 compared to 1990-91. Announcement of new industrial policy in June 1991. Abolition of industrial licensing for industrial projects except 18 industries of high strategic & environmental importance. About 80% of the industries were delicensed. MRTP act amended to eliminate the need for prior approval by large companies for capacity expansion & diversification. 9 areas in basic & core industries earlier reserved for public sector opened to private sector Slide 8: Limit of foreign equity holding raised from 40% to 51% in a wide range of priority industries. Foreign investment promotion board (FIPB) established to negotiate proposals from international firms & expedite clearances of the investment proposals. Bringing back of gold earlier pledged to the BOE & BOJ. Continuance of the measures of import control & credit squeeze. Introduction to liberalized exchange rate management system (LERMS). Slide 9: Import licensing was eliminated in many goods & advance licensing system was simplified. Foreign investment promotion board established to negotiate proposals from large international firms Rupee devaluation by 18 percent Negotiation of $500 million structural adjustment LIBERALIZATION PRIVATIZATIONGLOBALIZATION : LIBERALIZATION PRIVATIZATIONGLOBALIZATION LIBERALIZATION : LIBERALIZATION Slide 12: DELICENSING FREEDOM FROM LOCATIONAL REQUIREMENTS AND GOVERNMENT CLEARANCE PERMISSION TO CORPORATES FOR BUYBACK OF SHARES CORPORATISATION OF DEPARTMENTAL UNDERTAKINGS AND PUBLIC UNDERTAKING INCREASE IN THE INVESTMENT CEILING OF SMALL SCALE ENTERPRISES LIBERALIZATION OF TAX PROVISION FOR SELECTED SECTOR Slide 15: DIVESTITURE DENATIONALIZATION FRANCHISING OF PUBLIC SECTOR SERVICES TO DESIGNATED PRIVATE SECTOR UNITS LICENSING OF TECHNOLOGY OF PUBLIC SECTOR UNITS TO PRIVATE ENTERPRISE] GOVERNMENT WITHDRAWAL PRIVATIZATION OF MANAGEMENT OPENINING UP OF A NUMBER OF CORE SECTORS EARLIER RESERVED FOR PUBLIC SECTOR TO PRIVATE INVESTMENT FREEDOM TO BANKS TO DETERMINE THEIR OWN LENDING RATES GLOBALIZATION : GLOBALIZATION Slide 17: REDUCTION IN THE SCOPE OF RESTRICTIVE CANALIZED TRADE INCREASE IN THE LIMIT OF FOREIGN DIRECT INVESTMENT IN A NUMBER OF AREAS PERMISSION TO EXPORTERS TO KEEP FOREIGN EXCHANGE ACCOUNTS CREATION OF FOREIGN PROMOTION BOARD SUSTAINED REDUCTION IN THE CUSTOM DUTY RATES ON NUMBER OF IMPORT ITEMS REDUCTION OR ELIMINATION OF QUANTITATIVE RESTICTIONS ON A NUMBER OF IMPORT ITEMS REPLACEMENT OF FERA –MORE FEMA(1999) REFORM STRATEGY : REFORM STRATEGY Fiscal Strategy : Fiscal Strategy Reduction in fiscal deficit. Reduction in inflation rate. Improve fiscal balance. Supplementary efforts. Elimination of losses. Improvement in quality of taxation. Monetary Strategy : Monetary Strategy Macro-economic MNGT. Not be frequently used as a tool. SLR to be reduced. Interest rates reduced. Repurchase operations. Industry & Labour Strategy. : Industry & Labour Strategy. Removing regulatory obstacles. Deregulation of industry. Disinvestment in public sector. Increase in foreign share. Permission to float equity abroad. Competitive market structure. Growth in productivity. Withdrawal of power. Trade : Trade Liberalize foreign trade. Minimization of imports. Fixation of tariff. Removal of restrictions. Reduction in import tariff. AGRICULTURE : AGRICULTURE Growth rate. Investment & capital. Credit structure. Pricing policy. Agriculture products within the country. CRP(credit relief package) Increase in import duty. Quality improvement. INFRASTRUCTURE : INFRASTRUCTURE TRAI ( telecom regulatory authority of India). Private sector – BOT Golden Quadrilateral project. ACKNOWLEDGEMENT : ACKNOWLEDGEMENT We are thankful to the people who have helped in the making of this presentation, These people include our parents, our own Rakhi ma’am and our late friends. Slide 29: SAAJAN JAIN(5633) ANIKET PADE(5602) ANANT AGARWAL(5631) ALTAF KAROVALIA(5630) RAHUL BHAGAT(5635)

Add a comment

Related presentations

Related pages

1991 Indian economic crisis - Wikipedia, the free encyclopedia

With India’s foreign exchange reserves at $1.2 billion in January 1991 [2] [3] [4] and depleted by half by June, [4] barely enough to last for roughly 3 ...
Read more

1991 - Wikipedia, the free encyclopedia

1988 1989 1990 – 1991 – 1992 1993 1994: 1991 by topic: Subject: Archaeology; Architecture; Art; Aviation; ... June 23–28 – Iraq disarmament crisis: ...
Read more


Episode 73: June 1991. Welcome to the seventy-third episode of From Crisis to Crisis: A Superman Podcast! This podcast has a simple premise; examine just ...
Read more

Economic Crisis Forcing Once Self-Reliant India to Seek ...

Economic Crisis Forcing Once Self-Reliant India to Seek Aid By BERNARD WEINRAUB, Published: June 29, 1991
Read more

06/01/1991 Archives - Crisis Magazine

The pope’s splendid new encyclical, Centesimus Annus (dated May 1, 1991), adds a new characteristic to his defense of liberty. It has been clear for many ...
Read more

BoP Crisis in India - General Knowledge Today

This was the first BoP crisis, ... the Rupee was devalued by 36.5% in June 1966. ... India was under a sever BoP crisis. In 1991, ...
Read more

NATIVE-L (May-June 1991): Cost of Oka Crisis

Enclosed for your information is a copy of an editorial on the cost of Canadian Government failure to achieve a satisfactory political accommodation with ...
Read more

"The Crisis in Local Government" - The Christian Science ...

The Crisis in Local Government . Read preview. Newspaper article The Christian Science Monitor. The Crisis in Local ... June 11, 1991. SUBSCRIBE TODAY!
Read more

June 12 election - NigerianWiki

The Nigerian Presidential election of June 12, 1993 was an annulled election won by ... (1991), in the state ... June 12 And The Crisis Of A State Nation ...
Read more