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Page 1: Governance is an integral part of economic development

Governance is an integral part of

economic development

Page 2: Governance is an integral part of economic development

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 country’s affair at all levels.

Page 3: Governance is an integral part of economic development

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.

Page 4: Governance is an integral part of economic development

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.

Page 5: Governance is an integral part of economic development

7 major steps taken by INDIAN governmen

t for economic

reform

New industrial policy

New trade policy

Fiscal reforms

Monetary reforms

Capital market reforms

Phasing out subsidies

Dismantling price control

Page 6: Governance is an integral part of economic development

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

Page 7: Governance is an integral part of economic development

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

Page 8: Governance is an integral part of economic development

Fiscal Reforms

Fiscal Deficit Gross Domestic

Product (GDP)

Page 9: Governance is an integral part of economic development

Monetary Reforms

SLR Rate of interest

Income recognition of banks.

Permission to collect the money-

issuing shares Open banks-

private sector

Page 10: Governance is an integral part of economic development

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.

Page 11: Governance is an integral part of economic development

Phasing out Subsidies

• Cash Compensatory Support (CCS) which was earlier given as export subsidy has been stopped.

Page 12: Governance is an integral part of economic development

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.

Page 13: Governance is an integral part of economic development

Actions taken by governance for development

1. Remove barriers to trade and investment2. Improve their infrastructure

3. Developing countries access financial services4. Stimulating private sector investment in developing

countries5. Enabling businesses to include poor people directly

6. Supporting fair and ethical business operations7. Helping developing countries benefit from global and

regional trade8. 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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