The Comprehensive Structural Reforms undertaken to improve the Indian Economy since, 1991!
The Indian economy since, 1991 has been undergoing constant and drastic economic reforms. These reforms have resulted in a shift from the inward -oriented policy of the past to an outward looking one. The trend towards a liberal economic policy had fund its full expression in the early 1990’s with the Government of India announcing a series of packages of stabilization and structural policy reforms.
The economic policy reforms seems to have been guided mainly by concerns regarding the globalization of the Indian economy, in proving internal and external competitiveness, private sector participation and removal of inadequacies or constraints. At present the plans focus on growth targets per capita income of GDP, and the development of strategy is to be indirectly planning to promote the private sector.
Reforms undertaken to improve the Indian economy since, 1991 are:
a. Abolition of industrial and trade licensing.
b. Removal of state monopolies, privatization and disinvestment.
c. Liberalization of financial and capital market.
d. Liberal regime for FDI, portfolio investment, foreign technology.
e. Import institutions and export of primary goods, no import bias.
f. Reduction and rationalization of taxes and duties dispersion.
g. Sector-neutral monetary, fiscal and tariff policies.
h. Abolition of exchange control, full convertibility on current account.
i. Abolition of all administered prices essential on goods except for few strategies sector.
j. Decentralization sound institutional framework, degree of civil service reforms.
k. Rationalization of structure, and concessions being phased out.
l. The removal of quantitative restrictions being phased out.
m. The removal of quantitative restrictions on imports and a consistent decline in average and peak import tariffs.
These reforms probably lead to the higher growth performance in the post reform era. The overall growth in the post reform era was accelerated by a relative by higher growth in the service sector.
To some extent, during the first phase (1992-93 to 1996-97) the spurt in industrial activities and output could also be noticed. The growth rate of 6.1% in real output during the post-reform period (i.e., 1992-93 to 2002-03) was slightly higher the pre-reform decade of the eighties. This was achieved through competitiveness and efficiency gains. Recent statistics show that India’s external trade has increased significantly during the post reform period. To be precise, the share of India’s export in world mercantile trade has increased from 0.52% in 1990, to 0.8% in 2002, during the reform period India’s exports have increased from US $ 18.1 billion in 1990-91 to US. $ 52.8 billion in 2002-03, while India’s imports have increased from US & 24.1 billion in 1990-91 to US $ 61.6 billion in 2002-03.. The higher growth in India’s exports over imports has led to decline of India’s trade deficit.