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ISSUES OF STATE REGULATION AND SUPPORT OF STRUCTURAL CHANGES IN
THE INDUSTRIES OF THE NATIONAL ECONOMY
Khaydarov Khairulla Gulamovich
Associate professor of Tashkent Oriental university (PhD)
Annotation:
The article examines the issues of implementation of government regulation
instruments and support for structural changes in industrial sectors of the national economy.
Keywords:
Income, market relationships, monopoly, public consumption, taxes, interest
moment loans, depreciation rates , customs tariffs, budget expenses.
ENTRANCE
One of the principles of developing the national economy on the basis of market relations and
effectively implementing structural changes is the state's role as the main reformer. Support,
systematic control and development of sectors that occupy a decisive place in the socio-
economic processes of the country and are of great strategic importance cannot be achieved
without the participation of the state. Accordingly, the state should be the leading reformer in
developing and implementing the goals, objectives and main directions of structural changes in
the basic industrial sectors.
in industrial sectors of the economy are an important factor of state regulation and are an
economic activity of the state aimed at achieving general economic balance, ensuring more
efficient use of limited resources to meet consumer needs with manufactured goods, and
effectively organizing the process of social reproduction.
The goal of implementing structural changes is to ensure economic and social stability, adapt the
existing system of industrial production to the changing conditions in the country's economy, and
strengthen its position in international economic relations.
REVIEW OF RELATED LITERATURE
In industrial sectors of the economy There are various approaches to activating structural
changes. In particular, the theories of economists P. Gerhard and R. Andersen state that structural
changes consist in changing, updating, and reorganizing the property, economic, production,
commodity, and financial structure of industrial enterprises[1]. According to economist A.
Tutundjian, structural changes are a process of structural changes in the economy at various
levels: global, national, individual industries and sectors, and the economy of enterprises[2]. In
the theories of other economists E. Yasin and A. Yakovlev, it is emphasized that the process of
structural changes consists in the disappearance of old, inefficient types of production that do not
meet demand and, at the same time, the development of new, effective, competitive, modern
types of production activities [3]. Also, the studies of Yu.V.Yakovsev and S.I.Glazev highlight
the fact that structural changes in the economy can be described as a phase of a long economic
cycle wave[4].
RESEARCH METHODOLOGY
State regulation of the economy and socio-economic development of the country on the basis of
market relations are the main characteristic principles of modern economic processes . Therefore,
in the context of structural changes, the purpose of determining the state participation in
industrial sectors is to group enterprises with state participation, determine the goals of their
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activities; prohibit the establishment of enterprises with state participation that do not meet the
established goals; put an end to the practice of establishing enterprises with state participation
without a positive conclusion from the antimonopoly div; study the compliance of all
enterprises with state participation with the established goals and sell the state share in
enterprises where there is competition.
Today,
leading
industries
that
provide
a
significant
impetus
to
economic
development development strategy development - this includes the main directions and
indicators for the medium-term development and reform of the electric power, precious and non-
ferrous metals, and automotive industries, which require the implementation of direct measures
to implement reforms in these areas.
This means that any economic actions by the state that undermine the market mechanism must
be eliminated, because by coordinating state management methods and market mechanisms, it is
possible to stabilize production and achieve economic development.
It is known from the experience of developed countries that the provision of industrial
production processes is carried out through free market mechanisms. For this purpose, several
forms and mechanisms of effective state regulation are scientifically justified. In this regard, it is
advisable to use the following four types of state control :
direct method of control ;
social consumption;
state production;
product safety and social security.
Based on these directions, it is necessary to strengthen the influence of state control on economic
development processes in the following key areas :
indirect regulation (taxes, loan interest, depreciation rates, customs tariffs, etc.);
budget expenses;
material (raw material) flow management (government orders, licenses, quotas)[5].
Namely, socio-economic, sectoral, enterprise, regional, economic, and social stratum forms of
state support for structural changes in industrial enterprises have been implemented.
In our opinion, it is more appropriate to introduce a sectoral approach than macroeconomic
complexity. In this case, the role of each industrial sector in the economy, the state of resource
use, its importance as a taxpayer, its role in the region, and its political significance are of great
importance. As a result, the main goal is to increase the impact of the production of industrial
enterprises on the growth of the national economy and their role in the production of competitive,
export-oriented products.
RESULTS AND DISCUSSION
Based on the above global experiences, the following mechanisms for state support of structural
changes in leading industrial enterprises are proposed (Figure 1).
Ways to support structural changes
by the state
expansion of production capacities;
ensuring the population's needs for
products;
tax and financial policy;
combating monopoly;
modernization, innovation, increasing
scientific and technical potential;
legislative support.
structural investment policy;
analysis and forecast of growth of the
national economy;
importance in foreign economic activity;
state provision;
targeted regulation of funds;
privatization of enterprise property.
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Figure 1. Structural changes in leading industries by the state
ways to support by
From this picture, it can be concluded that the regulation of structural changes in heavy
production conditions in industrial sectors is an important lever. The impact of this regulation
should be closely linked to the internal production conditions and external economic relations of
industrial enterprises.
In this regard, state investment policy is important, ensuring the attraction of investments in the
development of industrial production and regulating the recommended investment factors and
mechanisms for assessing their effectiveness.
It is also important to conduct a forecast of the impact and growth of industrial enterprises in the
national economy, to develop their relations in foreign economic activity. On this basis, the
coherence of structural changes in industrial production with internal and external economic
relations is ensured. State support is regulated in these cases. At the same time, targeted funds
are allocated and monitored for structural changes. After that, privatization processes and an
increase in the share of enterprise shares are ensured.
It should be noted here that the main reformist role of the state does not imply direct
management of the activities of leading industrial enterprises. On the contrary, the main part of
the adoption of economic decisions and solutions, depending on the market situation of the
industry and other conditions of economic management, is transferred to the competence of
industrial enterprises. Today, factors such as the strength of the level of competition, the need for
protection from external influences require the use of all methods of state influence to ensure
structural changes in industrial enterprises. We can conditionally divide these methods into
indirect and direct types .
The indirect methods of state influence on industrial enterprises include a number of areas in the
field of financial and monetary regulation. In particular:
taxation system. In this regard, it is necessary to establish preferential conditions for taxation of
heavy industries and introduce tax holidays;
depreciation policy. Its most effective tools include establishing differentiated depreciation rates
at industrial enterprises, indexing depreciation allowances, and applying accelerated depreciation
rates;
credit policy. In credit policy, the discount rate and state guarantees are effective levers;
Customs legislation . In the context of structural changes, it is important to regulate the prices of
products of industrial enterprises, including monopolistic enterprises, and to apply preferences
for imported spare parts.
Also important is the regulation of monopoly as a method of indirect state influence.
Based on the experience of developed countries, it is recommended to use the following two
methods for regulating monopoly in conditions of structural change.
The first method is
for the government to regulate product prices and set standards for services in
industries where economic conditions and technologies create natural monopolies that make it
impossible for a competitive market to exist.
The second method is
that in most markets, due to the very high level of competition that ensures
efficient production, the state introduces anti-monopoly laws in order to protect and strengthen
competition.
In the context of direct state regulation, financial measures taken by industrial enterprises,
including investment in the sector or the allocation of subsidies, subventions, and grants from the
budget to enterprises, are of great importance.
1
Author's development based on scientific research
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At the same time, the expansion of the production capacity of industrial sectors is carried out by
decommissioning obsolete and obsolete fixed assets. In this process, based on the scientific and
technical potential of industrial sectors, emphasis is placed on modernization and innovative
development.
In the context of structural changes, it is advisable to restore the material and technical base of
leading industrial enterprises and strengthen the state's influence in this regard. It is advisable to
implement these processes in two stages.
At the first stage (2025-2026), it is necessary to use effective methods of structural
transformation by reducing the financial and budget deficit of industrial sectors, increasing the
solvency of enterprises, strengthening vertical ties of enterprises and regions with state
organizations, and strengthening state and banking control. As a result, it will be possible to
intensively increase technological potential at developed enterprises of the industry.
In the second stage (to be continued from 2027), economic growth, improving the well-being of
the population, and large-scale restoration of industrial development will be carried out on the
basis of state management. However, it is necessary to use the above opportunities based on a
national development strategy. In this regard, it is no longer possible to use the previous method
of distributing the limited resources of large industrial enterprises across all enterprises, first of
all.
Based on the above, it is advisable to carry out structural changes in the industrial sectors of the
national economy at the state policy level in the following three important directions.
liberalization of economic relations of leading industrial enterprises;
development of institutional institutions and private ownership relations related to industrial
sectors;
It is about improving the self-regulating market mechanism in real economic development.
While the first two directions can be implemented in the short and medium term, the third, the
direction of improving the self-regulating market mechanism in real economic development,
requires a long term and large investments. Because the reorganization of general production
systems, the technical base of equipment and raw materials, and the study and development of
technologies are based on the market mechanism to increase the economic efficiency of
industrial enterprises.
It is also important to pay attention to the territorial location of industrial enterprises when
implementing structural changes. That is, it is important to locate their regional facilities
depending on the demand for their products.
Another economic function of the state in the context of market relations is to facilitate and
protect the functioning of the market system. In this area, the following two types of economic
functions of the state can be distinguished:
ensuring a legal framework and social environment that allows the market system to function
effectively;
protection of competition.
It should be noted that the protection of competition serves as the main regulatory mechanism in
market relations. This is a force that subordinates producers and suppliers of resources to the
needs of buyers or consumers. In competitive conditions, the demand expressed by many buyers
and the supply of sellers determine market prices. This means that producers and suppliers of
resources can adapt to the desires of consumers, which are taken into account only through the
market. Competing producers, subject to the will of the market system, expect to profit and
strengthen their positions, but on the contrary, they suffer losses.
the current economic climate, one of the effective methods of structural change should be
focused on solving a number of tasks related to the process of reproduction. In this area, it is
necessary to initially implement priority tasks such as stimulating economic growth, regulating
employment, supporting positive shifts in sectoral and regional structures, protecting exports,
and protecting competition.
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In the context of structural changes, supporting the activities of manufacturing enterprises, like
other tasks of the state, is based on the general principles of economic regulation. Here, the state
uses methods of income redistribution, raw material resources, investment policy, and anti-
inflationary measures. They can be divided into the following three main groups:
redistribution of income and wealth;
redistribution of resources;
stabilizing the economy, i.e., economic fluctuations that cause inflation, etc.
The state also widely uses the tax system to redistribute income by establishing tax incentives.
The inability of market relations to redistribute resources is manifested in such conditions as the
production of a small amount of certain goods and services and the inability to allocate any type
of resources to certain goods and services whose production is justified. That is, this situation
gives rise to a competitive market system.
Redistribution of resources occurs when the benefits or losses associated with the production or
consumption of goods are transferred to third parties, that is, those who are not the direct buyers
or sellers. This is an additional effect, representing the benefit or loss attributable to the
contribution of a producer who is not a market participant.
In recent decades, in the context of structural changes in the world economy, especially in the
context of the global financial and economic crisis, theoretical views on ensuring economic
stability and the state's participation in regulating the economy have been changing radically. As
world practice shows, the reason for the economic downturn is usually the insufficiently
effective functioning of the public sector. Also, in the context of the financial and economic
crisis, the private sector does not have sufficient strength to solve its problems. Therefore,
improving the areas of state support for the market mechanism is an urgent issue.
Sustainable economic development is ensured by achieving an optimal balance between the state
and the private sector in the country. The normative level of state intervention in the economy in
conditions of structural changes is such that the state's activities do not interfere with the
functioning of the market mechanism and, if necessary, supplement this mechanism.
this level of regulatory intervention, state regulation of the economy should be based on the
following specific rules and principles:
The state must take into account the interests and needs of society when regulating the economy
and provide support of general economic importance when adopting measures;
It is necessary to use a diverse set of economic instruments in state regulation of the economy
and to abandon administrative instruments;
The state is required to create conditions for entrepreneurs to compete freely among themselves.
The state must move from being a participant in the competitive struggle to acting as the
supreme arbiter and manager;
State policy should be focused on achieving economic growth and mass prosperity by ensuring
social cooperation and solidarity, economic stability in the country.
In the context of structural changes in the economy, the state's share is decreasing compared to
previous periods, based on further expansion of privatization of state property and simplification
of its procedures, reduction of the state's participation in the share of authorized funds (share
packages) of production enterprises, and creation of favorable conditions for the development of
private entrepreneurship on the basis of privatized state-owned objects.
CONCLUSION
In the context of deep structural changes, the strategy for developing industrial sectors of the
economy should be based on the requirements of national needs in the organization of
fundamental research departments, modernization of the activities of science and technology and
innovation centers, the formation of qualified working groups, research laboratories, the
introduction of new technology projects, and the development of additional technology.
Today, the factors that hinder the attraction of foreign investments are the moral and physical
obsolescence of fixed assets of enterprises, the presence of receivables and payables, and the
lack of qualified specialists. For this reason, the state should take socio-economic measures,
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including attracting investments in the industry to modern technologies and specialization in the
production of competitive products based on them, attracting international funds and bank funds,
introducing leasing contracts on a large scale, establishing the ratio of their respective funds,
interest rates, tax payments, and eliminating other problems in the industry.
The process of structural changes is expected to be regulated by the state in order to determine
the development programs of economic sectors and assess the specific plan of measures for their
solutions, to impose taxation on the basis of certain privileges and to monitor their
implementation. It is also important to eliminate infrastructure and resource constraints in order
to assist industry enterprises in achieving positions in domestic and foreign markets, to
modernize the industry, to ensure a balance between economic and social goals.
LIST OF REFERENCES USED
1. Gerhard P. Andersen R. et al. Privatization and Restructuring of Industrial Enterprises in
Central and Eastern Europe. Washington. World Bank. 1998. -p. 18.
2. A. Tutunjian. Restructuring of the enterprise.// Marketing-2002. №2. P.88-101.
3. Yasin E., Yakovlev A. Competitiveness and modernization of the Russian economy //
Voprosy ekonomiki. 2004. - №7. - P.30.
4. Yakovsev Yu.V. Towards a New Structure of the Russian Economy. Moscow, 1993. - P.43.;
Glazev S.Yu. National Action Program: Social Justice and Economic Growth//www.glazev.ru
5. Deepening structural changes, modernization and diversification of the leading sectors of the
national economy.// Collection of lectures and theses. T. TSEU-2017. p. 320.
