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Policy of liberalization
relaxation of control;
accompanied
by
removal/
Parameters to measure
The main objectives of the India Economic
Policy is to take care of the basic parameters of
the Indian Economy as mentioned below:
Agriculture
Industry
Trade
1.Taxation
2.Public Borrowing
3.Public Expenditures
What is GST?
Goods and Service Tax (GST) is a comprehensive tax
levy on manufacture, sale and consumption of goods
and service at a national level.
LS: 8th Aug ; RS: 3rd Aug; Date: 1st April 2017
GST is a tax on goods and services with value
addition at each stage having comprehensive and
continuous chain of set-of benefits from the
producers/ service providers point up to the
retailers level where only the final consumer should
bear the tax.
Model of GST
The dual GST model proposed by the Empowered
Committee and accepted by the Centre will have dual
system for imposing the tax. GST shall have two
components i.e.
(i) Central GST
(ii) State GST
Central Excise duty, additional excise duty, services tax
and additional duty of customs (equivalent to excise),
state VAT entertainment tax, taxes on lotteries, betting
and gambling and entry tax (not levied by local
bodies)would be subsumed within GST
Luxury tax
Service Tax
Additional CVD
Surcharges
Ceses
Taxes on vehicles
Monetary Policy
The term monetary policy refers to actions taken by central
banks to affect monetary magnitudes or other financial
conditions.
Monetary Policy operates on monetary magnitudes or
variables such as money supply, interest rates and availability
of credit.
Monetary Policy ultimately operates through its influence on
expenditure flows in the economy.
In other words affects liquidity and by affecting liquidity, and
thus credit, it affects total demand in the economy.
Credit Policy
Central Bank may directly affect the money supply to control
its growth.Or it might act indirectly to affect cost and
availability of credit in the economy.
In modern times the bulk of money in developed economies
consists of bank deposits rather than currencies and coins.
So central banks today guide monetary developments with
instruments that control over deposit creation and influence
general financial conditions.
Credit policy is concerned with changes in the supply of credit.
Central Bank administers both the Credit and Monetary policy
Inflation targetting
Transition in 1991
Government decides to
encourage stable non-debt
creating long-term capital
flows.
Decontrolled, outwardoriented and marketfriendly system.
Allowed FDI in 35 highpriority industries.
Liberalization of FDI is a
part of reduction of scope of
the public sector.
State monopoly cramped to
only sectors of strategic
importance like atomic
energy.
TRADE POLICY
Under the old economic order, India followed a policy of
import substitution. This led to the establishment of a complex
system of licensing and control over imports through nonfiscal and fiscal barriers.
Trade Policy Reforms have been one of the major planks of
the new economic policies initiated from July 1991 which
were designed to attract significant capital inflows into India
on a sustained basis and to encourage technology collaboration
agreements between Indian and foreign firms.
New trade policy is spelt out in the Export Import (EXIM)
policy, which is valid for the period 1992 to 1997,
amendments to this policy were announced on 31st March
1995.
EXCHANGE RATE
All export and import transactions are conducted at the market
rate of exchange.
The market rate also applies to other transactions, including
inflow of foreign equity for investment and outflow in the
event of disinvestment, payments in respect of repatriation of
dividends, fees and royalties for technical know-how
agreements and also for foreign travel.
IMPORT POLICY
The recommendations of the tax reforms committee entailed
reduction in tariffs so that by the year 1997-98.
The duty on non-essential consumer goods would then be no
more than 50%.
IMPORT POLICY
All goods can be imported freely except for a small Negative List
consisting of:
Prohibited items : 3 items, import of which is not allowed.
Restricted items : Here, import is allowed against an import
license or under general schemes notified separately. According
to the latest changes in EXIM policy announced on 31st
March'95, the number of items in this list has been reduced to 65
from the earlier count of 72.
Canalised items : 7 items, import of which is permissible only
through designated agencies.
EXPORT POLICY
Exports are the major focus of India's trade policy. The export
promotion package compares favorably with incentives
offered elsewhere in the world. It makes special effort to
attract foreign investors to set up export oriented units in India.