The Policy Relaxation Committee (PRC) is a government agency in India that was set up in August 2014 to ease business and investment regulations. The PRC has five members, including the secretary of the Department of Industrial Policy and Promotion (DIPP) and the secretaries of the departments of economic affairs, revenue, corporate affairs, and shipping.The purpose of the committee is to simplify and rationalize the process of granting approvals to businesses, and to make it easier for them to comply with regulations. The committee also aims to promote foreign investment and create a more investor-friendly environment in India.
Negative Impact
1. Reduction in Foreign Direct Investment (FDI): One of the
most significant negative impacts of the PRC has been the reduction in foreign
direct investment (FDI) into India. This is because the relaxed investment
rules have made it easier for overseas investors to invest in other countries
rather than India. For example, the PRC has eased restrictions on foreign
ownership of Indian businesses, whereas overseas investors are still required
to partner with an Indian company when investing in China. This has led to a decline
in FDI inflows into India, which has in turn had a negative impact on economic
growth.
2. Rise in Inflation: Another significant negative
impact of the PRC has been the rise in inflation. This is because the
relaxation of investment rules has led to an increase in demand for goods and
services, which has put upward pressure on prices. For example, the PRC has
allowed Indian companies to invest in overseas businesses, which has resulted
in an increase in the demand for imports such as oil and gas. This has
contributed to higher inflation rates in India.
3. Decline in Exports: The PRC has also led to a decline
in exports from India. This is because the relaxed investment rules have made
it easier for Indian companies to invest in overseas businesses, which has
resulted in an increase in competition for Indian exporters. For example, the
PRC has allowed Indian companies to set up joint ventures with foreign
companies, which has provided foreign companies with a competitive advantage
over Indian companies. This has led to a decline in exports from India.
4. Reduction in Employment: The PRC has also led to a
reduction in employment in India. This is because the relaxation of investment
rules has led to an increase in the use of automation and robotics, which has
resulted in a decline in the demand for labour. For example, the PRC has
allowed Indian companies to invest in overseas businesses, which has led to an
increase in the use of automation and robotics by Indian companies. This has
resulted in a reduction in the demand for labour in India.
5. Increase in Debt: The PRC has also led to an
increase in debt in India. This is because the relaxation of investment rules
has resulted in an increase in the cost of capital, which has made it harder
for Indian companies to finance their operations. For example, the PRC has
allowed Indian companies to invest in overseas businesses, which has led to an
increase in the cost of capital for Indian companies. This has made it harder
for Indian companies to finance their operations, resulting in an increase in
debt.
Positive Impact
1. Increased Foreign Investment: One of the
most significant positive impacts of the Policy relaxation committee inMumbai has been the increased foreign investment into India. This is
because the relaxed investment rules have made it easier for overseas investors
to invest in India. For example, the PRC has eased restrictions on foreign
ownership of Indian businesses, which has resulted in an increase in foreign
investment into India.
2. Increased Economic Growth: Another
significant positive impact of the PRC has been the increased economic growth
in India. This is because the relaxation of investment rules has led to an
increase in demand for goods and services, which has put upward pressure on prices.
For example, the PRC has allowed Indian companies to invest in overseas
businesses, which has resulted in an increase in the demand for imports such as
oil and gas. This has contributed to higher economic growth rates in India.
3. Increased Employment: The PRC has also led to an
increase in employment in India. This is because the relaxation of investment
rules has led to an increase in the use of automation and robotics, which has
resulted in a decline in the demand for labour. For example, the PRC has
allowed Indian companies to invest in overseas businesses, which has led to an
increase in the use of automation and robotics by Indian companies. This has
resulted in an increase in employment in India.
4. Increased Exports: The PRC has also led to an
increase in exports from India. This is because the relaxed investment rules
have made it easier for Indian companies to invest in overseas businesses,
which has resulted in an increase in competition for Indian exporters. For
example, the PRC has allowed Indian companies to set up joint ventures with
foreign companies, which has provided foreign companies with a competitive
advantage over Indian companies. This has led to an increase in exports from
India.
5. Increased Economic Growth: The PRC
has also led to an increase in economic growth in India. This is because the
relaxation of investment rules has led to an increase in demand for goods and
services, which has put upward pressure on prices. For example, the PRC has
allowed Indian companies to invest in overseas businesses, which has resulted
in an increase in the demand for imports such as oil and gas. This has
contributed to higher economic growth rates in India.
