India s Transformation Case

1. During 1947 to 1990, mixed economy was India’s kind of economy, and later after India recognized the incapability of the system to deliver the economic progress that many Southeastern Asian nations had started to enjoy, India started to adapt a market economy system to become more attractive to the foreign possible investors and businesses. So, up to today, India has been using a market economy system, but, still with some government oversight which made the current economic system as a hybrid one. In the transformation conducted, it carries impediments which are the following; first, labor laws make it almost impossible for firms with more than 100 employees to fire workers. Second, other laws mandate that certain products can be manufactured only by small companies, which made it impossible for the companies to compete internationally.

2. Because of the widespread public ownership of businesses and extensive government regulations, the business can now be more productive by ruling over their own transactions without the hard intervention of the government. They can now operate and do some changes easily for the betterment of the organization’s performance unlike before that government is always there present in every business’s transactions. Although the government will never be lost in the lives of the businesses say for example the implementation of taxes and the protection of workers, employees and the representatives, at least the government of India is now lenient than before, and is giving away the businesses their freedom to operate the market. Also, in line with this change, India’s rate of economic growth rate will be increasing since the more businesses come and operate in the country, the more profit it could get which will be included in the country’s GDP. By means of an increasing economic growth, they have the increase in employment rate and a decrease in poverty. Another one big contribution to the country by letting a foreign company to enter