{"id":255980,"date":"2023-08-12T21:05:34","date_gmt":"2023-08-12T15:35:34","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=255980"},"modified":"2023-08-29T13:11:02","modified_gmt":"2023-08-29T07:41:02","slug":"a-cycle-of-reversal-on-indias-protectionist-policies","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/a-cycle-of-reversal-on-indias-protectionist-policies\/","title":{"rendered":"A cycle of Reversal – on India’s Protectionist Policies"},"content":{"rendered":"\n

Source<\/strong>– The post is based on the article \u201cA cycle of Reversal\u201d <\/strong>published in \u201cBusiness Standard\u201d <\/strong>on 12th August 2023<\/strong>.<\/p>\n

Syllabus: <\/strong>GS3- Effects of Liberalization on the Economy<\/p>\n

Relevance:<\/strong> Issues related to protectionist policies<\/p>\n

News<\/strong>– The article explains the significance of competition for businesses. It also explains the impact of protectionist policies on Indian consumers in the pre-liberalisation era.<\/p>\n

What is the impact of competition on businesses?<\/strong><\/h2>\n

In the absence of competition<\/strong>, businesses tend to become complacent<\/strong>. Service providers often lower their standards<\/strong>, and manufacturers may compromise on quality. <\/strong><\/p>\n

Businesses charge higher prices <\/strong>than warranted, and take advantage of guaranteed markets and the lack of competition.<\/strong><\/p>\n

How protectionist policies in the pre-liberalisation era impacted Indian consumers?<\/strong><\/h2>\n

Between 1947 and 1991, the country’s economic policy exhibited a distinct trend toward isolationism<\/strong>. The introduction of red tape through licensing increased, import tariffs rose, and the prohibition of various imported goods <\/strong>was common practice.<\/p>\n

During this period, only a handful of companies held manufacturing licenses<\/strong>, and innovation was stifled.<\/p>\n

Even minor inventions,<\/strong> like a new design for a bicycle lamp, required licensing<\/strong>. Additionally, major sectors like banking, aviation, mining, and telecommunications were nationalized <\/strong>and transformed into government monopolies<\/strong>. This further restricted competition.<\/strong><\/p>\n

Indian consumers had just two car models to choose from. Potential car buyers were obliged to place a deposit<\/strong> and endure months of waiting for delivery. Obtaining a new telephone connection<\/strong> took up to three years to become operational<\/p>\n

In case of air travel, Indian Airlines was the sole option. It imposed higher fares<\/strong> compared to other prominent global airlines.<\/p>\n

The telephone service<\/strong> was expensive, was also of poor quality and one of the priciest globally. Almost everything manufactured in India exhibited subpar quality. Plugs wouldn’t fit into outlets correctly.<\/p>\n

Most household appliances<\/strong> were absent. Microwaves, washing machines, dishwashers, high-performance bicycles, fashionable designer attire were non-existent.<\/p>\n

Importing goods <\/strong>posed considerable challenges. Stringent controls<\/strong> were imposed on foreign exchange,<\/strong> and a significant number of items were prohibited. Indians traveling abroad were only allowed an annual allowance of $50.<\/strong><\/p>\n

Even individuals who earned scholarships to pursue education abroad struggled with obtaining foreign exchange for their studies.<\/p>\n

How things changed after liberalization?<\/strong><\/h2>\n

Remarkably, quality improvement<\/strong>s were noted in various sectors as competition was permitted. New players differentiated themselves by offering higher quality products at lower prices.<\/strong><\/p>\n

Telecom market<\/strong>, swiftly transformed into the most affordable<\/strong>. Consumers gained access to over 100 models from numerous automobile companies.<\/p>\n

Students could secure loans<\/strong> from private banks to pursue education abroad, even if they didn’t come from affluent backgrounds.<\/p>\n","protected":false},"excerpt":{"rendered":"

Source– The post is based on the article \u201cA cycle of Reversal\u201d published in \u201cBusiness Standard\u201d on 12th August 2023. Syllabus: GS3- Effects of Liberalization on the Economy Relevance: Issues related to protectionist policies News– The article explains the significance of competition for businesses. It also explains the impact of protectionist policies on Indian consumers… Continue reading A cycle of Reversal – on India’s Protectionist Policies<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[216,8184],"class_list":["post-255980","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-3","tag-indian-economy","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704939021},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/255980","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=255980"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/255980\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=255980"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=255980"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=255980"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}