The Economic reforms currently underway in India represent both continuity and a break with India's post-independence development. Its main objective is to restore sustained high growth to alleviate poverty and raise the standard of living.
Development of Thought:
Changes in the policy packages towards deregulation, liberalization and opening up of the economy were initiated in the late 70s and early 80s but it was not until 1991 that major economic reforms were undertaken. The major changes in India's economic reforms fall broadly under five heads-industrial, trade, financial, fiscal and monetary.
However these measures of stabilization are not by themselves ...view middle of the document...
This has initiated a serious debate in the country on our development strategy for opening up the economy and allowing more market orientation, by removing major Government interventions and regulations.
Since 1977, and specially after 1985-86, the Government has embarked upon a series of economic reforms leading towards liberalization and deregulation Subsequently, there has been a significant improvement in the growth rate of the country-from the long existing, low rate of income growth of 3.5 percent to an average growth rate of 5.5 per cent and above.
As noted, the changes in the policy packages towards deregulation, liberalization and opening up of the economy had been initiated in the late 70s and early 80s. These changes were not systematic and were never integrated into an overall framework.
According to many economists, these changes were rather slow but not monotonic, until July 1991 when the new Congress Government came to power. Since then the change in the policy packages have picked up momentum. There have been major changes since July 1991.
The present Man Mohan Singh led Congress Government came into power in 2004. It has further extended the liberalization policy started in 1991. In its 2004-2005 and 2005-2006 budgets, the government has brought along with almost simultaneous changes in trade and finance announced outside the Budget.
These changes are primarily confined to Central Government activities and have not been given an} general policy directive to integrate with the overall policy packages of the State Government.
The major changes in India's economic reforms fall broadly under five heads-industrial, trades, financial, fiscal and monetary. The Government's key economic objective is to restore sustained high growth which is essential to alleviate poverty and raise the standard of living.
In pursuit of these objectives the Government's reform strategy aims at achieving over the course of the next five years:
(1) a liberalized trade regime characterized by tariff rates comparable to other industrializing developing countries and the absence of discretionary import licensing (with the exception of a small negative list);
(2) an exchange rate system which is free of the locative restrictions of trade;
(3) a financial system operating in a competitive market environment and regulated by sound prudential norms and standards;
(4) an efficient and dynamic industrial sector subject only to regulations relating to environmental security, strategic concerns- industrial safety and unfair trading and monopolistic practices; and
(5) an autonomous, competitive and streamlined public enterprise sector geared to the provision of essential infrastructure goods and services, the development of key natural resources and areas of strategic concern.
It involves taking every step necessary to ensure that the burden of adjustment is fairly distributed and that the very poor are protected. As a first...