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Economic Growth Models in

India

LPG & PURA

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The Crisis of June 1991

India was having balance of payment

problems since 1985

Foreign exchange reserves reduced by a

large amount

Central Bank had refused new credit

Gulf War-Downfall of Soviet Union

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India had to pledge 67 tons of gold reserves to IMF in order

to secure an emergency loan

P.V. Narsimha Rao took over as Prime Minister and roped

in Dr. Manmohan Singh as Finance Minister

Government ushered several reforms collectively known asLiberalization in media.

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Liberalization, Privatization and

Globalization model of development(LPG)

In 1991, The then Finance Minister Dr. Manmohan Singh

presented a new strategy with emphasis on LPG and many

changes were proposed:

Areas reserved for the public sector were opened to private

sector

The private sector was permitted to set up Industrial unitswithout taking a license

The threshold limit of assets was abolished in respect of

MRTP companies and dominant undertakings

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With a view to facilitate direct foreign investment, the

government decided to grant approval for direct foreign

investment up to 51 percent in high priority areas.

Chronically Sick Public sector enterprises were referred to

the Board for Industrial and Financial Reconstruction(BIFR)

for formulation of revival/rehabilitation schemes.

Autonomy was given to PSU managements and Boards of

public sector companies were made more professional in

order to improve the performance of public sector

enterprises

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Abolishment of

Industrial Licensing

De-reservation of

IndustriesFor Public Sector

Liberalized policy towards

Foreign Capital and Technology

Changes in MRTP act

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PURA-Providing Urban Amenities in

Rural Areas

Dr. A.P.J. Abdul Kalam ever since he became the President of

India has been advocating his Vision 2020 and to eradicate

poverty from India, he has been emphasizing the adoption

of PURA

The roadmap involves integrated action on following areas:

Agriculture and food processing

Reliable and quality electric power

Development of strategic sectors

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Education and health care for all

Expansion of information and communication technology

(ICT) to rural areas and to promote education and createnational wealth

PURA MODEL:

It involves four connectivity :Physical Connectivity,

Electronic, Knowledge and thereby leading to economic

connectivity

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Depending upon region and the State of presentdevelopment, PURA can be classified into three different

categories

Type A ClusterSituated close to an urban areahaving minimal road connectivity , limited infrastructure,

limited support

Type B ClusterSituated close to urban area buthas sparsely spread infrastructure and no connectivity

Type C Clusterlocated far interior with no

infrastructure and no connectivity

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PURA model- Implementations

Government in 2004 accorded in principleapproval for the execution of PURA

A sum of Rs 3 cr was provided for each cluster

The Eleventh Plan provided Rs 248 cr for PURA in

PPP mode.