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Governance is an integral part of economic development

Date post:28-Jan-2015
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Its all about government norms, policies and laws it also explains the seven measures taken by government for economic reforms
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  • 1. Governance is an integral part of economic development

2. WHAT IS GOVERNANCE? It relates to decisions that define expectations , grant power or verify performance. Governance is an act of governing The exercise of economic, political and administrative authority to manage a countrys affair at all levels. 3. Simply it means exercising power and decision making for a group of people is governance. It comprises mechanism processes and institution through which citizen and groups articulate their interest , exercise their legal right meet their obligation and mediate their differences. 4. Importance of government The world leaders at 2005 world summit concluded that good governance is integral to economic growth the eradication of poverty and hungry, and sustainable development. The views of all groups , including women , youth and the poor, must be heard and considered by governing bodies because they will be the ones most negatively affected if good governance is not achieved. People have a right to information and to access. Although widespread accessibility remains a barrier for many countries one of those ways is through information and communication technology (ICT) applications such as the internet. 5. 7 major steps taken by INDIAN government for economic reform New industrial policy New trade policy Fiscal reforms Monetary reforms Capital market reforms Phasing out subsidies Dismantling price control 6. New industrial policy Abolition of licensing. freedom to import latest technology Encourage foreign investment FERA is replaced by FEMA Contraction of Public Sector MRTP Restrictions Removed Increase in the Importance of Small Industries 7. New trade policy Reduction in Restrictions of Export-Import Reduction in Export-Import Tax Easy Procedure of Export-Import Establishment of Foreign Capital Market Full Convertibility on Current Account Providing Incentive for Export 8. Fiscal Reforms Fiscal Deficit Gross Domestic Product (GDP) 9. Monetary Reforms SLR Rate of interest Income recognition of banks. Permission to collect the money- issuing shares Open banks-private sector 10. Portfolio Investment Scheme Securities and Exchange Board of India (SEBI) has been established. interest on debentures has been lifted companies are free to determine the price of the shares. Private sector has been permitted to establish Mutual Fund. 11. Phasing out Subsidies Cash Compensatory Support (CCS) which was earlier given as export subsidy has been stopped. 12. Dismantling Price Control The government has taken steps to remove price control in case of many products. Price Control means that the companies will sell goods at the prices determined by the government. The efforts to remove price control were mostly in respect of fertilizers, steel and iron and petro products. Restrictions on the import of these products have also been removed. 13. Actions taken by governance for development 1. Remove barriers to trade and investment 2. Improve their infrastructure 3. Developing countries access financial services 4. Stimulating private sector investment in developing countries 5. Enabling businesses to include poor people directly 6. Supporting fair and ethical business operations 7. Helping developing countries benefit from global and regional trade 8. Providing debt relief for developing countries 9. Research evidence on promoting sustainable economic development in developing countries 10.Helping developing countries to improve their provision of basic services

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