Discuss the main features of the Rao Manmohan Model of Development.
The features of Rao-Manmohan Model Development are:
It abolished licensing in all industries except a small list of 18 industries, MRTP companies were free from the ceiling limit of assets. It reduces import barriers to globalize the economy, by granting more autonomy and making management more professional, functioning of public sector companies were to be improved, foreign direct investment was facilitated and automatic approvals upto 51% of equity required.
More than 51% equity could be considered on a case-by-case basic. Although the government failed to transfer ownership of public sector undertakings, it did succeed in opening hitherto reserved areas to the private sector. This model was initiated in 1991 and emphasized privatization and globalization of the economy.
The statement that while the model succeeded on growth by raising the GDP growth rate to more than 6% level, but it failed on equity as: It has a narrow focus, limited to, corporate sector only, because of the indiscriminate entry of multinational a highly capital intensive pattern of development adopted.
It has a bypassed agricultural and by raising the equity level above 51% multinationals have started the process of swallowing Indian firms. In a nutshell, we can state that Rao-Manmohan model has succeeded on growth but failed on equity, employment and poverty removal.