policy paralysis

POLICY PARALYSIS AND NEED FOR SECOND GENERATION
REFORMS IN INDIA
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Global economic condition and internal issues such as policy indexes, corruption and subsides hampered India Growth Story.

The primary reason for Slow-Down of Indian Economy
 Global Slowdown
Global Economic downturn affected India’s exports and services business
 Coalition government
No strong figurehead emerged from the coalition government
Government policies were populistic rather than futuristic for long term growth
 Policy Paralysis
Slowdown of economic reforms made India an unsuitable destination to run business
 Corruption
Government accused of multiple scams such as $5bn Telecom Spectrum scam, $29bn Coal mine scam, Vodafone Royalty payment issue etc.
 Implementation Bottlenecks
Improper action plan and poor allocation of funds resulted in delayed projects that led to overruns of 15 BN

Policy Paralysis:
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Improper action plan & allocation of budgeting which lead to delay of project and cost overrun by 1.74 lakh crores
Manufacturing sector contracting from growth of 3.5 % in 2011-2012 to 3.1% in 2012-2013 due to lack of investment from foreign companies. This is due to the uncertainty created by government policies further weakened by scams
301 central projects which require investment of more than 150 crore were delayed
Due to law and order, delay in land acquisition funds constraint rehabilitation and resettlement problem 738 projects under MOSPI (Ministry of Statistics and Programmable
Implementation) lead to increase in cost from 9.05 lakh to 10.79 lakh.
Regressive taxation policies in conjunction with general ant avoidance rules affected the investors community
Loss of confidence among the foreign investors and MNC resulted in decrease in FDI and foreign exchange rate

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On the other hand if we look traditional Aspect of Indian economy
 3rd largest consumer driven economy
 2 ranking in FDI confidence rating
 1 trillion investment in infrastructure
 Largest young