ABSTRACT
This chapter highlights the changes that have taken place in the areas of industrial and financial reforms, privatization programs, and trade policy, indicating the issues and benefits that have accrued. Implementation of all the projects will increase government expenditure; however, this is both politically astute and consistent with the long-term economic reforms planned for the country. The banking industry has the most powerful labor unions, making labor issues in the banking sector some of the most difficult to resolve, but they must be tackled before privatization of this sector is contemplated. The problem of the public-sector units (PSUs) is large by any standard; there are 246 PSUs in a “state of near-paralysis”. India’s strong labor unions make it imperative for the government to enunciate an “exit” policy, defining procedures for companies to lay off employees as and when required either on account of adverse economic conditions or inadequate plant utilization.
