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Economic Policies

>> November 11, 2009


Definition of Economic Policies
All policies which are made for development of economy and its stability are called economic policies. Last year economic crisis and after coming its main roots, economic
policies are become most important and every country makes its after deep research and analysis.



Followings are the main economic policies:-


1. Industrial Policies :-

Industrial policies are the one of the important part of economic policies. For working of industry in peace environment, these policies are made. These policies may be different according to the size and location of industry.

2. Trade Policies:-

Trade policy is relating to import and export of goods. Govt. makes trade policy for protecting domestic industry by levying of tax on import.

3. Foreign exchange policy:-

It is also the part of economic policy. For exchanging the currency and better movement of international capital, these policies are made in international capital market.

4. Foreign investment and technology policy:-

This policy is very helpful for getting large amount in form of foreign investment and high skill in form of technology. Govt. makes this policy more liberalized to attract foreign investors.

5. Fiscal Policy:-

Fiscal policy is very advance tool to promote economy. Govt. can reduce the rate of indirect tax for removing recession from country under fiscal measurements .


6. Monetary policy:-

Monetary Policy is made by central bank of any country. RBI uses several tools of monetary policy like bank rate, open market operations and direct regulations.


Critical Role of Economic Policies:-


In India, there are approximate six economic policies and policies are so important for development of India economy. But there are also many shortcomings, we can see in these , which we can explain following way :-


Industrial policies affect on domestic industry adversely. Govt. promotes only big companies.


  Economic policies can be criticized that these are affected from world economy which can not be controlled by govt.


Govt. has no direct control on monetary policies due to the control of RBI. So, it is less represented by public.


Liberalized foreign investment are decreasing the portion of public sector.




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