Monday, December 6, 2010
How Did India Control Economic Crisis- A Lesson For Pakistan
If a good deed is performed by an enemy, one must recognize and appreciate that setting enmity aside for a moment. After partition PM Pandit Nehro introduced socialistic economic policies under which steel, mining, insurance and banking were nationalized tp promote public sector. Many taxs were imposed on imports, foreign investment was discouraged,local business men were put in the grip of business licenses and permits, quota and. Supremacy of bureaucracy created red tapism for corporate and business class. Therefore, the policies introduced by Pandit Nehro and his daughter Indra Gandhi for the benefit of the economic growth could not produce positive results, and from 1947 to 1980 annual economic growth of India remained 3.5 % while Pakistan had 5 %. During 1984, Rajev Gandhi made business easier for the beginners and taxes rate was decreased. So, investment got promoted and telecom sector came into being. Economic growth reached to 5.6 %. In 1991, Narsema Rao started extensive reforms and made the Finance Minster Manmohan Singh responsible for this "libralization" policies. He invited foreign investment and taxes were minimized that boosted Indian economic growth and India was on the path of progress. These policies were also continued by Atal Bihari Vajpaey. Though still India is not at par with developed countries but has made its conomic condition better. Some positive results are:- from 1991 to 2009, 300 mn Indians got rid of poverty. Economic growth of India reached to 9 % during 2007 and India became the world second economically growing power. In 1991 , foreign investment was only 132 mn dollars, today foreign investment is 30 - 35 bn dollars. Banglore, Haidarabad, Gurgaon, and Ahmadabad became the hub of national and international trade activities. Per ca pita income reached to 7 % annual while while it was 2 % for decades. During 1991 foreign exchange reservoirs were 1.2 bn dollars , now
it has 298 bn dollars, while Pakistan has only 17 bn dollars, and this is due to IMF and World Bank's Loans. Population birth rate is 1.32 % due to education and consciousness. India is now 5th economic power with GDP as highest as 2.57 trillion dollars., while Pakistan with 433 bn dollars is on 28 th position. Pakistan must learn lesson from the productive policies of neighboring country.