1.Increases Production
2.Diversification of Cropping Pattern
3.Better Price
4.Increased Exports
NEGATIVE EFFECTS:
1.Lack of Self-Sufficiency
2.Price Stability
3.Affects Poor Farmers
4.Entry of MNCs
IMPACT ON INDUSTRIES
Industrialization through import substitution and public sector production with emphasis on heavy industry has been a very important objective of our planning for development. In particular an important distinction was made among industries to be developed exclusively by the public sector, those reserved for the private sector, and those open to development by either or both sectors.
The reforms of 1991 abolished industrial licensing, except in a few industries for locational reasons or for environmental considerations, and import licensing, except in the case of most consumer goods. Restrictions under the Monopolies and Restrictive Trade Practices Act were eased. Entry requirements (including limits on equity participation) for foreign direct investment were relaxed, private (domestic and foreign) investment were allowed into sectors such as power which had been reserved for public sector investment only. Disinvestment of equity in the public sector was also initiated. The reforms, by focusing primarily on the private sector and not addressing the problems of PSEs, have exacerbated them.
Industry accounts for 28% of the GDP and employ 14% of the total workforce.[20] In absolute terms, India is 12th in the world in terms of nominal factory output.[77] The Indian industrial sector underwent significant changes as a result of the economic reforms of 1991, which removed import restrictions, brought in foreign competition, led to privatization of certain public sector industries, liberalized the FDI regime, improved infrastructure and led to an expansion in the production of fast moving consumer goods.[78] Post-liberalization, the Indian private sector was