In India, economic reforms refer to measures that the government has taken to enhance the performance of the economy and remove obstacles to growth. These reforms have the goal of creating an open, competitive, and attractive economy. They also aim to attract investment and foster economic development.
Background
In 1991, India began economic reforms when faced with a serious balance of payment crisis. Manmohan singh’s government began a number of reforms which liberalized and reopened the Indian economy. The reforms include devaluation, deregulation, liberalization and trade policies.
The Key Reforms
- Liberalization: the dismantling and opening of the economic system to foreign investments.
- Privatization: the sale of State-owned Enterprises to Private Investors.
- Deregulation is the removal of unnecessary rules and regulations to encourage business growth.
- Tax Reform: Reducing tax rates and simplifying the tax system to promote investment.
- Financial Sector reforms: strengthening the banking system, and increasing access.
Impact of Reforms
Economic reforms have had an important impact on India’s economy. India’s economy has grown faster, the poverty rate has decreased, and there has been an increase in foreign investment. Nevertheless, there are challenges such as the income inequalities, creating jobs and developing infrastructure.
Economic Reforms Examples
- GST: Goods and Services Tax is an unified tax system, introduced in 2017, to streamline and simplify the tax regime.
- National Infrastructure Pipeline : Invest in infrastructure projects for economic growth.
- Atmanirbhar Bharat Abhiyan : An India self-reliant campaign that promotes domestic manufacturing to reduce dependency on imports.
FAQs
1. What is economic reform?
Economic reforms is a term used to describe the policy actions taken by the Government to enhance the economic performance of the Country and to foster economic growth.
2. When did India start economic reforms?
India launched economic reforms to address a crisis in the balance of payment in 1991.
3. What are India’s key reforms?
India has undertaken a number of reforms, including liberalization, deregulation and tax reform.
4. What impact has economic reforms had in India so far?
India’s economic reforms led to an accelerated growth in GDP, lower poverty rates, and more foreign investment.
5. What are examples of economic reforms that have taken place in India?
India’s economic reforms include the Goods and Services Tax (GST), the National Infrastructure Pipeline and the Atmanirbhar Bharati Abhiyan.
