COMPETITION: A POTENT TOOL FOR ECONOMIC DEVEOPMENT AND SOCIO-ECONOMIC WELFARE
22nd July 1955, my grandfather booked a telephone for his residence. Considered to be a luxury, the phone, was not available to all. My mother vividly remembers my grandfather, standing in the queues for long hours to book this luxury item. 16th August 1960, on the eve of my Grandfather’s second daughter’s birthday, the phone arrived. The wait was over. Our family had a telephone.
22nd July 2012, I go to buy a phone connection for myself. I had received hundreds of varied offers from various service providers such as Airtel, Vodafone, Tata Docomo and Idea. They were nice enough to even take an appointment and visit my house to explain their various offerings and the reasons to select their offering over their competitor offering. After almost a week of deliberation, I decided to go ahead with one, whose phone connection plan was cost-efficient and attractive. How times have changed!
This paradigm shift in business attitude towards consumers must, largely, be credited to the fact that, unlike in the 1960’s, where there existed a single company, there is now a large number of companies, offering products/services which are competing with each other to lure as many customers as possible. The direct beneficiaries are the consumers, who have a choice to pick from a varied set of products/services which are of far more superior quality and at competitive prices. This has been made possible only because the telecom industry has opened up to competition, consequent to which, all Companies are fighting for customer loyalty.
Ever since the economic reforms of 1991, which opened the door for globalisation, liberalisation and selective Privatisation, the Indian economy, has seen un-precedented growth. As predicted by Goldman Sachs, A Global Investment Bank, by 2035, India would be the third largest economy of the world; Only after US and China.
India had maintained a healthy GDP growth of 8.5% - 9 % on a year on year basis until FY 2007-2008. The effects of the Sub-prime mortgage crisis, the Global Economic Slowdown and the Eurozone Debt crisis have, in many ways, crippled the economy in the last couple of years.
In the last two decades India has come a long way in terms of Economic Growth and Development. India’s growth rate, in fact, was as high as 6.8% during the period of 1992 – 2006. Even in the `crisis year’ of 2008 India managed a GDP growth of 7.3% while other Economies saw it slide into negative.
Poverty levels have shown significant reduction from the levels of 40% of our population in the 1980’s to moderate level of 25%. India has now achieved a respectable level of international trade and investment activity. Growth of goods exports between 2000 and 2007 averaged 14% per year, with a peak at 19% in 2006. Services export growth was 17% per annum on average between 2000 and 2007, with a record 25% in 2006. India accounts already for 2.7% of world exports of services and is the fifth largest services exporting economy in the world. Foreign Direct Investment levels have risen dramatically, reaching a high of $ 23billion in FY 2007-2008.
All these characteristics are definitely a sign that India is certainly matured / geared enough to take on a `Liberal’ liberalisation.
In short the key sector reforms brought in a multiplier effect resulting in enhanced foreign participation, collaboration and enhanced competitiveness of the players in the particular industry/economy who were able to offer a variety of superior quality goods and services at economical prices.
If two decades of partial liberalisation can bring about so much inclusive growth, further reforms in key sectors will only facilitate greater economic growth and development.
However, the current situation of the Indian economy is not all rosy. The Indian Economy has been plagued by various issues both Economic and Social in nature. The recent depreciation of the...
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