After the attainment of independence, it was realized that in order to achieve self-sustained growth and self-generating economy in decades what other nations have achieved in centuries, we must evoke a strategy for economic growth.
As a result, our country has wedded to an era of industrialization with the help of suitable technology, planning strategy, socio-economic policy and developmental programmes.
Thus, the role of the public sector has been considered important. Saying good-by to laissez faire system India regarded public sector, mixed economy and socialistic pattern of society as a panacea for all economic evils.
In the meanwhile, economic planning was launched with the broad object to rebuild the economy. In short, more than four decades of economic planning have witnessed mixture of success and failures.
ADVERTISEMENTS:
It was felt that all is not well with the development of public sector despite its high strides in many fields. Foreign exchange reserves too were in a bad state of affairs to finance our imports. Non residential accounts were being withdrawn and fresh loan facilities were not available.
Industrial growth became regressive and inflation was assuming alarming proportions. There were uneven changes at a global level. The first stroke was faced by U.S.S.R. The charms of socialism were melting in favour of free market economy. Thus, keeping the various facts in mind, everyone urged to introduce new economic policy reforms.
In order to redeem the economy from the clutches of the economic crisis and to put it on the road to rapid development, the Government of India made some radical changes in its policies regarding foreign investment, trade, exchange rate, industry and fiscal affairs etc.
Since July 1991 when the rupee was devalued, the Government of India has announced several new policies under the name of New Economic Reforms. Although these economic reforms relate to different areas of the economy, yet these have a common spirit to pave the way to prosperity of the economy.