![]() The unsustainable development practices also lead to the impoverishment of the poor. The substantial changes the institutional arrangement for rural credit, a key factor in helping the poor to escape poverty, due to the reforms in the banking sector have gone against the interests of the rural poor. Reducing social benefits in order to reduce payroll fringe costs to increase competitive ability leads to “social dumping” which means a process that lowers production costs through low wages and substandard social conditions.Įconomic liberalisation and globalisation had a direct impact both on rural and urban poverty. The structural adjustment policies of the national government involving the relinquishing of economic activities from the public sector into the hands of the private sector, i.e., the state moving away from economic planning and leaving economic decisions to the market, will result in the withdrawal of social protection to the public. The consequence of the reduction in the role of the government and the public sector and its replacement with private sector means that the access of people to employment, capital and social services like education, housing and health services will be much less. ![]() Total government expenditure in India in public spending increased at a per annum rate of 11.0% during the 1960s, 7.1 % in the 1970s, 6.46% in the 1980s, but it declined to a per annum rate of 4.7% in the 1990s. The reduction in the government’s economic role reflected in a decline in the public spending. ![]() The liberalisation of the economy resulted in a general reduction in the role of the State in economic governance. ![]()
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