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LIMITATIONS OF LPG POLICY ON INDIAN ECONOMY

  1. Low Growth of Agriculture Sector-

  Agriculture has been and still remains the backbone of the Indian economy. It plays a vital role not only in providing food and nutrition to the people, but also in the supply of raw material to industries and to export trade.

  In 1991, agriculture provided employment to 72 per cent of the population and contributed 29.02per cent of the gross domestic product. However, in 2014 the share of agriculture in the GDP went down drastically to17.9 per cent. This has resulted in a lowering the per capita income of the farmers and increasing the rural indebtedness.

2. Threat from foreign competition-

  Due to opening up of the Indian economy to foreign competition through Liberalization and FDI policy more MNC’s are attracted towards India after 1991 reforms and they are competing local businesses and companies.

  Since, these MNC’s have lots of financial capacity or those are big organizations with advanced foreign technology so, they have large production capacity and huge money for promotion and other research activities they are easily defeating our Indian local companies. And they had acquired many Indian companies as well.

  Because of financial constraints, lack of advanced technology and production inefficiencies our Indian companies are facing problem in this globalization period.

3. Adverse Impact on Environment-

  Globalization has also contributed to the destruction of the environment through pollution and clearing of vegetation cover.

  With the construction of companies, the emissions from manufacturing plants are causing environmental pollution which further affects the health of many peoples.

  The construction also destroys the vegetation cover which is important in the very survival of both humans and other animals.

  1. Increase in Income disparity-

  Globalization leads to widening income gaps within the country. Globalization benefits only to those who have the skills and the technology in the country.

  The higher growth rate achieved by an economy can be at the expense of declining incomes of people who may be rendered redundant.

  Globalization has widened the gap between the rich and poor, rises inequalities.

5. Growth and Employment:

 Though the GDP growth rate has increased in the reform period, scholars point out that the reform- led growth has not generated sufficient employment opportunities in the country.

 

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