India Economic and Financial Policy in the 2000’s
A vigorous expansion of production and the surplus of the current account have been among the main achievements that the UI has achieved since 2002 following the important socio-economic reforms carried out since the 1990s. This allowed the country to start emerging on the world stage as a new economic superpower.
In particular, in the 2002-2007 Five-Year Plan, the State declared its willingness to pursue annual growth rates close to 7-8% by leveraging mainly on the progressive diffusion and protection of competition and on the increasing use of technological innovation. The opening to foreign investment capital and the products of foreign companies, the privatization of some state-owned companies, the clear definition of the rules for the functioning of the market and the identification of tools necessary to guarantee its protection, the fight against corruption and the development of an adequate endowment of infrastructures have been fundamental instrumental measures for the expansion of production. Recognizing that high costs and constraints were imposed on companies for entering and exiting the market, the competent authorities committed themselves to finding solutions to these rigidities: state agencies dedicated to interaction with industrial groups and multinationals in order to ensure investments and propose policies and tools useful for the development of the national entrepreneurial fabric. After the agreements signed with the WTO at the beginning of the21st century, the UI has also worked to remove the numerous trade barriers and to adopt the tariff system of the Association of South-East Asian Nations (ASEAN) by 2009 in order to promote the exchange of goods and services with foreign countries and encourage the competitiveness of national companies. The consequent liberalization of trade flows has made it possible to enter the world market of the UI as a competitive competitor capable of exporting products with a high technological content thanks to the progressive creation of an innovative production environment, an area of interest for international companies. Investments from abroad, although still subject to constraints in some sectors of the tertiary sector, have allowed an increase in the productivity of companies and, in general, a more efficient use of financial resources, especially in the automotive, IT and electronic sectors.
According to Topschoolsintheusa, the central government’s priorities also included adequate internal market infrastructure, without which economic growth would have remained insufficient. Investments have therefore been promoted by the State – in which the private sector has participated only marginally – to develop the road and rail network, make air transport easier and more widespread, modernize port facilities, and guarantee widespread coverage of the energy supply. electricity, improve the provision of infrastructures in urban centers. The financial sector has been reformed with the aim of facilitating access to credit for farmers, entrepreneurs and small savers. A regulation capable of ensuring greater protection of savings, a more complete information on the instruments made available by credit institutions, a call to increase the use of pension funds were among the main directions of economic policy in the sector. Interventions on the labor market have been limited, as the government argued that the labor force from the countryside and the numerous young people and women entering the world of work for the first time would have contributed to the expansion of productive activity by benefiting in turn naturally of the greater wealth produced and distributed by the system. Nonetheless, the government introduced in the Interventions on the labor market have been limited, as the government argued that the labor force from the countryside and the numerous young people and women entering the world of work for the first time would have contributed to the expansion of productive activity by benefiting in turn naturally of the greater wealth produced and distributed by the system. Nonetheless, the government introduced in the Interventions on the labor market have been limited, as the government argued that the labor force from the countryside and the numerous young people and women entering the world of work for the first time would have contributed to the expansion of productive activity by benefiting in turn naturally of the greater wealth produced and distributed by the system. Nonetheless, the government introduced in the 2004 some elements of greater flexibility in the organization of employment relationships and he was willing to identify specific economic zones in which to verify the effectiveness of these new measures.
The government has implemented further interventions in the agricultural sector, where the economic results were strongly influenced by the weather conditions. In particular, investments were promoted aimed at extending the irrigation of arable land, at diversifying production – especially in fruit and vegetables -, at making greater use of the climatic peculiarities of the various areas of the extended territory, at increasing the processing of food products by developing also the quality of work in the sector, to encourage the increase in exports. This reformist orientation replaced the original economic policy orientation which aimed mainly at guaranteeing independence from abroad for the internal needs of cereals and sugar.
Since 2004, the central government has been engaged in tax reforms capable of ensuring the consolidation of public finances through a revision of the tax system and the reorganization of the complex system of subsidies. The extension in 2005 is one of the most significant measures adopted of value added tax on operations carried out by the central state. Furthermore, greater rigor has been ensured to fiscal policy guidelines by ensuring that the increase in tax collection due to the expansion of national production is accompanied by a rationalization of state expenditure. Consequently, the containment of the growth of wages and pensions was strongly pursued, while the administrative offices involved in the collection of State revenues were called to a more efficient and transparent management.
Although economic policy was geared towards achieving sustained growth in the country, government authorities are also engaged in social reforms aimed at reducing poverty, promoting the spread of education and ensuring health protection. This orientation was made explicit by the government that took office in 2004 which is committed to implementing ‘reforms with a human face’ in the medium term to increase the provision of infrastructures and ensure access to basic education and health even in the most backward rural areas. and in general to guarantee the poorest populations the minimum economic conditions for a dignified existence.