Macro –Economic reforms &

Structural adjustments
 Government brought a series of Macro
economic correction and reforms of
economic institutions and structural
adjustments.
 They are as follows under macro-
economic reforms.
C. Fiscal and monetary reforms:

1)reduction of fiscal deficits

2) reduction of tax systems
3) interest rate reforms
4) inflation control.
 B. Banking Reforms
1. Banks to operate as commercial
institution
2. Phasing out priority sector lending
3. Deregulation of deposit interest
rates
4. Operational freedom in lending
rates
5. Adherence to norms on capital
adequacy
 C. Capital market reforms

1. Abolition of CCI (controller of capital

issues) and introduction of free
pricing
2. Strengthening of SEBI
3. Opening up of India capital market
to FII’s
4. Allowing foreign brokers in Indian
capital markets
5. Allowing private sector on mutual
funds
 Structural adjustment
 Under structural adjustment we have:
B. Market driven price environment.
3. Phasing out subsidies
4. Dismantling of price control
5. Axe on fertilizer subsidy
6. Abolition of sugar subsidy
7. Axe on product subsidy
8. Partial decontrol and marketing of
kerosene and LPG
9. Steel price decontrol
 B. Public sector
restructuring
1. No new PSU’s & no expansion of
PSU’s with government equity
2. Budgetary support for PSU’s to be
Phased out.
3. Preference to PSU’s in government
tenders abolished
4. Disinvestment of government
equity in PSU’s
5. Sick PSU’s to be referred to BIFR
(Board of industrial and financial
 C. Exit policy
 Support to VRS
 Creation of NRF (National renewal
fund)
Result: A sea change in The
Business environment
A. Entrepreneurial freedom releases
the growth impulses and alters the
industrial scene:

3. Rush of Entrepreneurs
4. spate of merger and acquisition
5. The Diversification Rush
 B. Multinational
consolidated their position
 C. Imports go out of
government domain and
become entrepreneurial
activity
D. Capital market undergo
radical change
E. Banking sector comes
under a competitive
environment
 F. Financial services
emerges as a major new
business
G. Pervasiveness of private
sectors in Major core areas