Current classification of INDIAN economy.

1. FIVE PILLARS OF ECONOMIC
DEVELOPMENT.
• Five pillar of growth presents the major results of
a short term research projects identifying the FIVE
MAJOR AREAS of reforms deemed pivotal in
pursuing sustained economic growth and
alleviation of poverty of the country.
pinkey gupta
CIMS B-SCHOOL

2. The major areas/pillars of economic
reforms are as follows.
1. MACROECONOMIC
AL STABILITY.
2. INVESTMENT
CLIMATE.
3. GOVERNANCE.
4. SOCIAL REFORMS.
5. ENVIRONMENTAL
MANAGEMENT.

3. A. ACHEVING MACROECONOMIC
STABILITY.
 It is crucial that it is
supported by a
prudent monetary
and an effective
external debt
management policy to
ensure external sector
viability.
 To achieve
macroeconomic
stability following
measures should be
considered.

4. I. ADDRESSING FISCAL DEFICITS.
1. IMPROVE REVENUE COLLECTIONS.
ADMINISTRATIVE REFORMS.
Improve tax administration.
Institutionalize an attrition system.
revenue measures.
Rationalize fiscal incentives.
Reduce exemption from VAT.
Index excise taxes on cigarettes & alcohol.

5.  Increases excise tax on petroleum products.
 Pursue tax decentralization.
 Introduce a second wave of privatization.
2.IMPROVE EXPENDITURE MANAGEMENT.
 Review allocation for priority development
assistance fund (PDAF).
 Strengthen performance assessment &
evaluation system for each agency.
 Adopt a medium term expenditure frame work.
 Re-engineer the bureaucracy.
 Enact a fiscal responsibility bill.

6. 3. Contain fiscal risk from
gocc’s & contingent
liabilities due to
guarantees.
 Strengthen govt. oversight of GOCC’s
operations during budget deliberations.
 Limit automatic guarantees to BOT
investors & GOCC’s.
 Make contingent liabilities(CL’s) more
transparent.
 Set a budget for contingent liabilities
separate from GAA that should be approved

7. 4. Managing public debt
efficiently.
Ensure effective debt management
at all times by borrowing
preferably at least cost with longer
maturities.

8. II.MAIMTAINING STABLE
MONETARY INDICATORS.
1.INFLIATION.
Ensure a flexible & market based
interest &
foreign exchange rate.

9. 2. External sector and
external debt.
• Promote trade co-operation &
enhance trade competition
policies.
• Expand the export base.
• Assist micro, small & medium
enterprises (MSME’s) through
financial & technical support.

10. III. STRENGTHENING THE FINANCIAL
SECTOR.
1.ADDRESSING THE BANKING
SECTOR’S PROBLEMS.
• Synchronize regulatory
functions.
• Address issues of ownership
structure structures &
jurisdictions.
• Enact a credit reporting law.

11. 2.Capital mobilization from non-bank sources.
 Enact a law or personal
equity retirement
account (PERA).
 Amend the insurance
code.
 Update the investment
corporation act.
 Ensure efficiency in
regulating corporations.
 Disentangle banks from
corporations.

12. B.CREATING A BETTER BUSINESS
ENVIRONMENT.
I. INFRASTRUCTURE DEVELOPMENT.
1.An efficient infrastructure system is key
factor in a country’s economic
development because it facilitates the
movement of goods, services & people.
2.Ensure efficient management of public
fund for rural infrastructure.
3.Promote transparency in project bidding &
implementation.

13. ii. Power sector development.
 The huge capital investment that
necessities great participations of
private investors in the energy
sector.
 1.Strengthen the regulatory
framework of the energy sector.
 2.Rationalize generation rates.
 3.Develop new renewable energy
sources.
 4.Accelerate open access.
 5.Re-examine vertical merges &
cross-ownership.

14. iii. Regulatory concerns.
An efficient regulatory environment is critical
in attracting investment necessary to generate
& encourage productivity.
1.Minimize corruption through streamlining of
govt. regulation.
2.Enact the corporation recovery law.
3.Enact a comprehensive competition policy.
4.Liberalize further the public utilities sectors.

15. iv. Technology management.
Only technology indicator in which the country
does excellently is in terms of high technology
export.
1. Prioritize the research agenda.
2. Provide a more attractive tax incentive
scheme.
3. Strengthen the governance & institutional
frame work of the science & technology system.
4. Improve science & technology educations.
5. Manage technology transfer, utilization &
commercialization.

16. C. ESTABLISHING GOOD GOVERNANCES
AND STRONG INSTITUTIONS.
With increased
pressure to create
efficient market &
attract investments,
government are now
compelled to build
better institutions & to
incorporate good
governance in policy
& program
implementation.

17. i. Strengthen the bureaucracy.
Re-engineer the
Bureaucracy by
rationalizing the
functions of
agencies.
 Amend the civil
services code.
Review the salary
standardization law
(SSL).

18. ii. Improve the delivery of basic services.
 Strengthen the
oversight
functions of govt.
forming parties.
 Pass an integrated
identifications
systems for
efficient service
delivery.

19. iii. Ensure enforcement of the judicial system.
Support reforms in
the judicial system.
Consider the
recommendation of
the Feliciano
commission.
Enact a
whistleblower’s
protection act.

20. iv. Institute political and electoral reform.
Develop genuine political parties.
Institute capsizing finance reforms.
Pursue COMELEC reorganization
& review the Omnibus election
code.

21. D. INSTITUTING SOCIAL REFORMS TO
IMPROVE EQUITY.
Economic policies should
be complemented with the
appropriate social reforms
policy interventions which
empower the individual to
be productive agents in the
economy & ultimately
society.

22. i. Prioritizing social reforms.
ii. Educational sectors.
 Review the magna carter for
public school teachers.
 Realization the public higher
educations sectors.
 Conduct a study on the special
educations funds of the LGU’s.
 Address financial constraints to
meet classroom & book
shortages & teachers training.

23. iii. Health sector.
 Increase delivery of the primary
health care.
 Re-tool & Re-train the health
professionals.
 Develop & strengthen the
technical expertise of public health
practitioners.
 Improve the role of the local
government in health care delivery
& financing.
 Adopt & improve priority &
policies to improve maternal
health that include information ,
education & communication (IEC)
activities.

24. iv. Housing sector.
Prioritize government
funding assistance.
Encourage private
sector investment in
low cost buildings.
Encourage community
approach home-ownership.

25. v. Access to land.
 Allow farmers to use the land as
collateral.
 Enact & implement a national
land use policy.
 Increase tax on idle lands.
 Adopt a more acceptable land
valuations systems.
 Ensure efficient use of
government funds.

26. vi. Access to employment opportunities.
 Incorporate a six-month on the job
training in the school curricula.
 Upgrade workers skills &
competencies.
 Promote a stronger public-private
partnership in developing an
effective labor market information
system.
 Review the system of providing
retirement disability & others social
protection scheme to workers.

27. E. MANAGING THE
ENVIRONMENT.
Rapid environment changes
can lead to special
circumstances in the society,
such as migrations,
urbanizations, deterioration's
of the persons health
conditions displacement of
indigenous people a
communities & lack of
access to basic environment
services such as water.

28. 1. Adopt & implement an integrated water shed
management policy.
2. enact a national land use policy.
3. formulate & adopt capacity –building &
awareness initiative's.
4. formulate & adopt an appropriate incentive
system.
5. Establishing proper environment accounting
system.
6. ensure strict implementation of environmental
laws.

29. thank you.