Major Policy
Initiatives
Road
Construction
National
highways provide essential connectivity to urban and rural areas and are the
backbone of any country's transportation system. India needs a strong and
extensive network of roads to keep up with development given its quickly
increasing frugalness. One of India's most renowned politicians, Atal Bihari
Vajpayee, presided as prime minister from 1998 to 2004.
He made a
substantial contribution to the transformation of India's road and
transportation system during his tenure. A frugalness that he inherited was
struggling to keep up with the rest of the world. Particularly in need of an
upgrade was the transportation industry. The country's infrastructure,
including its road system, was in disarray. Vajpayee acknowledged the necessity
to deal with these problems and started various businesses that would change
India's transportation industry. He is renowned for his contributions to the
country's structural advancement and prosperous expansion. . During his tenure
as Prime Minister, Vajpayee launched several initiatives aimed at improving the
transportation and road infrastructure in the country. Public-private
hookups( PPP) were encouraged, and colorful models were introduced
to make investment in the sector more seductive. The government
also established the National Highways Authority of India( NHAI) in 2002
to oversee the development of roadways in the country. The
major enterprise taken are-
1.
Pradhan Mantri Gram Sadak Yojana( PMGSY)
The Pradhan
Mantri Gram Sadak Yojana (PMGSY), introduced by Vajpayee in 2000, was one of
his most major business ventures. The goal of this plan was to connect all of
the country's townlets with rain roads. The program was designed to provide
connectivity to the nation's rural regions and aid in the development of
pastoral areas. Over 5 lakh km of roads have been built as part of this
program, and over 1 lakh habitations are now connected to all-weather highways.
2. Project for
Development of National Highways
Additionally,
in 1998, Vajpayee launched the National Highways Development Project (NHDP).
This project was designed to connect important cities, ports, and industrial
districts by widening and improving the existing roadways and building new
ones. The Golden Quadrilateral project, which sought to link four significant
Indian cities, was finished in 2006. The project took a record six years to
complete and spanned a distance of 5,846 kilometers. The NHDP was broken down
into seven phases, and the government set a goal of building 7,000 km of
roadways annually. by the end of 2010, the entire length of national highways
had grown to almost 71,000 km, and it reached 132,500 km in 2018–19.
3. The Golden
Quadrilateral
The Golden
Quadrilateral design was one of Vajpayee's most important ventures. This
plan used roads to connect the four major metropolises of Delhi, Mumbai,
Chennai, and Kolkata. The design traveled 5,846 kilometres and was finished six
times faster than the previous record. The Golden Quadrilateral improved
connection between the major metropolises and gave the areas it covered a boost
for successful expansion.
Telecom Growth
Private
investments helped the cellular telephone business become competitive, and the
Value-Added Services (VAS) market also allowed for private participation.
During this time, the Narasimha Rao administration introduced the National
Telecommunications Policy (NTP), which overhauled the ownership, management,
and regulation of telecommunications infrastructure. The approach aimed to
bring telecommunication services to every Indian hamlet and promoted the
concept of universal access to telecommunications. Plans for the deregulation
of fundamental telecom services were also part of this agenda. They were also
effective in establishing alliances between foreign businesses and state-owned
telecom providers. A total of 49% of the share was available to international
corporations. The multinational corporations were solely interested in
transferring technology; they were not involved in establishing policies.
The
international organizations IMF and World Bank urged the Indian government to
liberalize long-distance teleservices in order to break the state-owned fleck
and VSNL's monopolies and open the market to competition in the long-distance
carrier market. This would help reduce rates and improve the country's
frugalness. Instead, the Rao-led government liberalized original services to
win over opposition parties and ensure foreign participation in the long-distance
assiduity in later years. Twenty telecom circles were created for the country's
initial phone service, and 18 telecom circles were created for mobile service.
Two service providers were allowed to operate in the cellular service member
per circle, and each was issued a 15- time license.The government encountered
opposition from the ITI, DoT, MTNL, VSNL, and other labor unions during all of
these improvements, but they were able to overcome every obstacle.
The telecom
policy of the NDA government under Vajpayee, which was published in 1999,
opened the door for structural reforms in the industry, resulting in a
record-breaking increase in mobile subscribers, the entry of competition into
the wireless tele-services sector, and a number of deeply ingrained
nonsupervisory reforms, which were also encouraged by a correction to the TRAI
Act, 1999. Rather than requiring customers to cover fixed expenses, the new
telecom policy of 1999 allowed companies to offer mobile services on a
profit-share basis. He was constantly motivated by the idea that liberalization
would allow us to celebrate our lucrative eventuality and, in the end, prepare
the way for our country to establish itself as an encyclopedically competitive,
strong, and prosperous nation. He was a great profitable leftist.
In 1997, the
government established the Telecom Regulatory Authority of India (TRAI), ending
government involvement in pricing and program development. New political forces
entered the picture in 1999, and Atal Bihari Vajpayee's new government promoted
reforms and improved liberalization policies.
The Telecom
controversies agreement and Appellate Tribunal was established by the Vajpayee
administration in 2000 with an amendment to the TRAI Act 1997. The Department
of Telecommunication Services (DTS), which later adopted the name Bharat
Sanchar NigamLtd. (BSNL), corporately renamed the fleck's operations division.
The proposal to enhance the foreign investors' 49 percent stake to 74 percent
was rejected by the opposing political parties and socialist thinkers. The
country's business organisations pushed the government to privatize VSNL.
Finally, in April 2002, the government decided to lower the control it held
over VSNL from 53 to 26 and make it available for sale to private companies. In
the end, TATA bought a 25 percent interest in VSNL. Numerous foreign investors
used this as a point of entry into the Indian telecom industry. According
to legend, the last two decades have been the astuteness' "golden
age," with rapid-fire improvements. in demand, legislation, and
technology. India has the second-largest telecom customer base in the world,
and it has rapidly grown in recent years. A key factor in the sector's
explosive growth has been the combination of high consumer demand with liberal
and reformist plans.
Exports of
mobile phones increased by $5 billion in just seven months, with phone
shipments more than doubling year over year between April and October. This is
more than twice as much money as India made in the same period of 2017 ($2.2
billion). India will have 920 million unique mobile users by 2025, of whom 88
million will be 5G subscribers, making it the second-largest smartphone market
worldwide. According to the GSMA, this is. Additionally, it is predicted that
between 2023 and 2040, 5G technology will significantly increase India's
thriftiness by $450 billion. India has added approximately 500 million new
Smartphone addicts in the past ten years. There will be 850 million Smartphone
addicts by 2026, or about 55 percent of the population. The Department of
Telecommunications (2023) intends to create a 30 lakh km fiber-optic cable
network with an average download speed of 25 Mbps and 100 broadband access
points, according to its Annual Report. 55 fiberization of movable halls in rural
locations. From 61 million in March 2014 to 816 million in September 2022, the
number of broadband connections climbed by 1238. The plan is to fiberize 70
buildings by the end of 2024, providing an average internet speed of 50 MBPS
and rolling out 50 lakh kilometers of fiber optic cable over the entire country
of India. The Network Readiness Index 2022 places India in the 61st position,
moving up six spots. India also comes in second place in terms of
"International Internet Bandwidth" and "Mobile Broadband
Internet Business within the country." India is third in the world in
terms of "Domestic Request Size" and "Annual Investment in
Dispatches Services."
By the end of
January 2023, 5G services had been activated across all authorized service
zones in 238 metropolises. In the global rankings for average mobile pets,
India climbs 10 species, from 69th in January 2023 to th in December.
Privatization and
Disinvestment
For the first
40 years after gaining independence, the nation decided to follow a development
path in which the public sector operated as the profitable machine. The public
sector continued to outgrow itself, and its excesses became apparent in the
sector's low capacity for application and low effectiveness as a result of
overstaffing, poor work ethics, overcapitalization as a result of significant
time and cost overruns, a lack of innovation, an inability to form quick and
timely opinions, a significant delay in the decision-making process, etc. On
the other hand, the private sector started to indicate signals of expansion. As
a result, the choice to implement the Disinvestment plan was decided in 1991.
India started
to change in 1991–1992, when 31 PSUs were selected and sold for a total of Rs.
3038 crores. The Disinvestment Commission, which was established in August 1996
to direct, oversee, monitor, and publicize the gradual disinvestment of Indian
PSUs, was presided over by G. V. Ramakrishna. 13 research were included, and
they offered suggestions for privatizing 57 PSUs. Later, in July 2001, Dr. R.H.
Patil took charge of this commission. Disinvestment received more attention
during the Vajpayee administration. The Disinvestment Commission, however,
stopped operating in May 2004.
The Department
of Disinvestment was created as a separate department by the Vajpayee
administration in December 1999, and the Ministry of Disinvestment followed
suit in September 2001. In May 2004, the Ministry of Finance added the
Department of Disinvestment to its departments. From 1991–1992 to 2000–2001, a
total of Rs. 54300 crore was intended to be raised by PSU disinvestment;
however, the government was only able to raise less than half of that amount,
or Rs. 20078.62 crore. It's important to note that only three out of ten months
saw a government meeting. In 1993–1994 there were no PSU disinvestment proceeds
over the expected amount of Rs.3500 crore.
The following
are some of the major causes of similar little or minimal consumption:
1)Unpredictable
request conditions,
2)Private
Players setting up the monstrous trade offer,
3)Controversial
valuation of PSEs,
4)Persistent
Policy Nebulosity,
5)Large-scale
Trade Union and Worker Rejections,
6)Transparency
Issues, Missing or Weak Political Will
The trade of
nonage holdings in the PSEs through the distribution of shares for trade to
domestic and international investors generated the disinvestment proceeds
realized during this time. In fact, because the government controlled
well-known companies like IOC, BPCL, HPCL, GAIL, and VSNL, the value obtained
by trading shares was minimal. Most of these nonage stake proposals were
accepted by domestic financial institutions during this time. The Unit Trust of
India was one such significant institution.
1. NDA
Administration (1997–1998 to 2003–2004)
2)1During this
time, significant disinvestments were made by Vajpayee's administration. These
either came in the shape of strategic agreements conforming to an efficient
transfer of operation control to private investors or a trade offer to the
general public, with the government maintaining control of the power. Between
1980 and 1989, the financial deficit was 6.5% on average. The financial
shortage was somewhat reduced after the LPG policy went into effect in 1991,
but from 2004 to 2021, it significantly decreased once the FRBM Act went into
effect. From 2004 to 2014, the financial deficit was around 4.6 of GDP, and
from 2014 to 2022, it was, on average, 4.8 of GDP. FRBM attempts to achieve the
three target goals while also assisting in reducing the financial imbalance.
2. Congress (UPA) Government (2004-2005 to 2013-2014)
The issue of
disinvestment became more politically conflicting during the UPA-I regime. It
led to a virtual halt of the exercise during this period. Only Rs.8515.93 Crore in total were received from disinvestments
in the five years from 2003-04 to 2008-09. The disinvestment proceeds, however,
showed a much larger volume
during the UPA-II government, amounting to Rs.84208 Crore during the four-year period from 2009-10 to 2012-13.
1. NDA Government (2013-2014 to 2022-2023)
A renewed focus
on disinvestments was initially caused by a stable administration and better
stock market circumstances.
Minority holdings in listed and unlisted (profit-making) PSUs were sold by the government as the process's initial
step. By making open offers during this time period, disinvestments were made in businesses like REC,
NMDC, SJVN, EIL, CIL, MOIL, and NHPC Ltd. Also, compared to a target of Rs.175000 crore, final
realizations fell to Rs.15440 crore (revised target: Rs.78000 crore in 2021-2022).
Fiscal Policy
Reforms
Economic Survey
was defined there as "the excess of government expenditure and net lending
over current revenues." The term "fiscal deficit" is now
frequently used to describe the government's deficit budget. Economists and
analysts keep a close eye on the phrase, which has been frequently used to
describe the financial health of the country. The government also views this as
one of the most significant statistics and, in addition to publishing it along
with other budgetary data, computes the expected fiscal deficit when it
presents its annual budget. It also offers guidance on what the anticipated
level of the fiscal deficit would be in the upcoming years.
Large and
ongoing fiscal deficits are generally considered detrimental to strong
macroeconomic outcomes by policymakers and other decision-makers. Such deficits
frequently discourage private investment, raise the risk of inflation, weaken
the balance of payments (BoP), complicate financial sector reform, and place a
debt burden on future generations. The fiscal deficit is one of the challenges
India has faced since gaining independence. India's fiscal deficit averaged
6-7% during the 1990s, never dropping below 3%. The government attempted to
address this issue, but it did not adopt any measures that would lower the
fiscal deficit below 3%. The Vajpayee government took the initiative towards
fiscal consolidation, and on August 26, 2003, the Fiscal Responsibility and
Budget Management Act (FRBMA) was enacted by the Parliament of India. The Act
became operational on July 5, 2004. The FRBM Act specifies goals and suggests
strategies for reducing revenue and budgetary deficits. It proposed yearly
targets to gradually reduce fiscal and revenue deficits in order to achieve the
targeted debt-to-GDP ratio.
All of the
government's outstanding liabilities are referred to as debt, while the fiscal
deficit refers to fresh borrowing during the year and the revenue shortfall to
the extent that these fresh borrowings were used to cover revenue expenses.
Savings in the public sector increased as a result, rising from -0.8% of GDP in
FY 2000.
India first
experienced issues with its balance of payments in the middle of the 1980s.
India's oil import bill increased, exports declined, financing dried up, and
investors withdrew their capital as a result of the Gulf War. Over time, large
fiscal deficits produced a cascading effect on the trade imbalance that
resulted in an external payments crisis. At the end of the 1980s, India's
economy was in dire straits. After introducing the LPG policy in 1991, it
decreased the fiscal deficit to some extent, but not much. So, in 1999, the
Vajpayee government launched an initiative to address the issue of the fiscal
deficit and introduced the FRBM Act, which set a goal of 3% of the fiscal
deficit after being put into effect. Despite the fact that the budget deficit
increased during the financial crisis of 2008, The COVID-19 pandemic issue has
reemerged, and the country's economic deficit, which is currently between 6-7%
of GDP, remains beyond normal. Yet, since 2004, the FRBM strategy has had a
substantial impact on decreasing the fiscal deficit problem since we have used
a normal period.
Fiscal deficit
varies during the periods corresponding to different governments. During the
1980-89 period, the fiscal deficit was on average 6.5%. After implementing the
LPG policy in 1991, some reduction was seen, but after implementing the FRBM
Act, there is a high decline in the fiscal deficit during the 2004 to 2021
period. In the period 2004 to 2014, the fiscal deficit was at around 4.6%, and
between the 2014 to 2022 period, it was, on average, at 4.8% of GDP. Thus, FRBM
plays an important role in reducing the fiscal deficit while still attempting
to meet the 3% target.
