Indian Economic Reforms: Since 1991- GK Notes for SSC & Bank Exams in PDF!
1 year ago .
Learning about Indian Economy and its progression is of utmost importance while you prepare for Government Exams like SSC CGL, SSC MTS, IB ACIO, IBPS Clerk, IBPS PO, Insurance Exams & more! Moreover, various questions in such exams are directed towards Indian Economic Reforms – Since 1991, as this stage was a watershed event that paved a way to the economic progress of our nation. Therefore, from the sluggish growth stage to the rapid reforms stage, studying about the Indian Economic System is crucial. Get aware about Liberalisation, Privatisation & Globalisation – the three most important pillars.
Indian Economic Reforms: Since 1991 – An Introduction
Although the history of Indian Economic Reforms or liberalisation dates back to the late 1970s, experts believe that the turning point in our economy was in the year 1991, which witnessed a battery of economic reforms. What do you mean by economic reform and how does it impact the nation? Well, in simple terms, economic reform means changes introduced by the Government to bring about an improvement in the country’s economic condition. The most significant impact of economic reforms is on the growth rate of the country.
So what really happened in the year 1991? What were these Indian Economic Reforms?
The year 1991, witnessed the three pedestals of reforms in Indian Economy. They were:
You can remember these reforms by the acronym (LPG – as in LPG cylinder). Let’s understand these economic reforms.
Indian Economic Reforms – Liberalisation in Indian Economy
As the word suggests, liberalisation means to become free or to get liberated. This liberation was from the shackles of licence-raj, which was causing a bottleneck for the economic growth in India.
Major Impacts of Liberalisation in Indian Economy:
- Today, India is one of the leading exporters of software, services and IT products.
- Stock market values rose
- Reduced the political risk to investors
Indian Economic Reforms – Privatisation in Indian Economy
We generally use the term private bus or private school, which is synonymous to non-government. So, in the simpler parlance, privatisation means disinvesting loss making government (Public) sector enterprises and giving the private players a chance to move into this segment.
Government companies were converted into private companies either by:
- Withdrawal of the government from the management and ownership or
- Selling the some share of public sector companies to private players
Some industries were given the status of:
- Maharatnas – Examples are Indian Oil Corporation Limited and Steel Authority of India Limited.
- Navratnas – Examples are Hindustan Aeronautics Limited and National Aluminium Company (NALCO).
- Miniratnas – Examples are BSNL (Bharat Sanchar Nigam Limited), Airport Authority of India, and IRCTC (Indian Railway Catering and Tourism Corporation) Limited.
Indian Economic Reforms – Globalisation in Indian Economy
Before the year 1991, India was a closed economy in which Indian companies competed only with Indian companies and there were no foreign players. Post-1991, the Indian domestic market was integrated with the global market. So, foreign players set their foot on Indian soil. Competition increased for the Indian companies, but foreign money also started flowing into India in the form of investments. Globalisation also helped Indian companies in a big way. Now even Indian companies can invest in other countries and get in the foreign business.
India has witnessed a boom in the outsourcing industry after the 1991 economic reforms. The businesses that are getting outsourced to India are:
Due to the economic reforms, today’s India sees a substantial increase in:
- Manufacturing sector
- Foreign Direct Investment
- Financial flows
- International trade, and many others
The economic reforms of 1991 had their shares of ups and downs, but by and large, India has benefited from this strategic economic move.
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Kshitija Gotpagar is a Senior Content Writer and a YouTube Video Presenter with experience in Academic Content Writing & a degree in Journalism. Having appeared for various competitive exams like UPSC, CDS, IB ACIO, SBI PO and currently specializing in Sociology as a subject, Kshitija is adept in providing crisp, to the point & SEO-rich content.