1991 Economic Reforms
Modern India after independence has bought several Economic Reforms like Gandhian Economics, Bombay Plan, Nehruvian Model, First and Second 5 Year plan, etc.. However, one of the significant Economic reforms that happened in the history of India is the 1991 Economic Reforms. With the Economic Crisis that India had faced there had been a rapid change in the following areas:
- Liberalization
- Privatization
- Globalization
In short I call this as LPG!!
Liberalization, Privatization, Globalization:
The economic reforms have bought an extended advantage to the private industries in expanding its horizon, which was earlier just restricted to public sectors. Many industries took this as an advantage to enter into the competing market of public sector industries. This happened to expand the role of private and foreign investment in the Indian economy.
This included both the stabilization policy and the structural reforms made by the IMF (International Monetary Fund) and World Bank. The stabilization policy included the fiscal correction, liberalization of trade and exchange rate, while the structural reforms include reforms of industrial policy and public sector.
1991 Economic Reforms has substantially increased foreign investment in the Indian Economy. Some of the significant reforms included the industrial delicensing, divestment of public sector units, trade reforms, which included the floating exchange rate, and FDI changes.
At a crux, liberalization includes movement into the free market; privatization consists of the shift of economic activities from the public sector to the private sector, Globalization informs that the country draws raw materials from any part of the world and produces the goods and services.
I hope this gives a clear picture of the major economic reform that happened, which bought the contribution of India GDP drastically increased by the year 2006.
Happy reading and learning folks!! Love learning and love reading!!
https://en.wikipedia.org/wiki/Economic_liberalisation_in_India
