Essay On Economic Reforms In India

Essay On Economic Reforms In India: India is a developing country, in this article, we are going to discuss Economic reforms in India and their importance, which the Government of India introduced in July 1991. You can also find more English essay articles about events, people, sports, culture, technology, etc.

Importance of Economic Reform

Economic reforms relate to the fundamental changes that were initiated in 1991 with the intention of liberalizing the economy and accelerating its development rate. In 1991, the government of Narasimha Rao initiated economic reforms to restore internal and foreign faith in the Indian economy. The reforms intended to increase the private sector’s participation in the Indian economy’s growth strategy.

Regarding technological advancement, industrial licensing, the elimination of constraints on the private sector, foreign investments, and international trade, new policies were proposed. Liberalization, Privatization, and Globalization (abbreviated as LPG) are the defining characteristics of economic reforms.

In other words, “economic reforms” typically refer to deregulation or, at times, a reduction in the size of government to eliminate deformities caused by management or the presence of administration, rather than current or increased regulations or government plans to reduce market failure’s perversions.

Long and Short Essays on Economic Reforms In India for Students in English

Long and short essay writings in English on the topic of “Economic Reforms in India” are provided for students below. The first essay is a 500-600 word paper on Economic Reforms in India. This lengthy essay on Economic Reforms in India is appropriate for students in classes 7,8,9, and 10, as well as those preparing for competitive exams. The second essay is a 200-word brief on Economic Reforms in India. These materials are appropriate for students in grades 6 and below.

Long Essay on Economic Reforms In India 500 Words in English

This Long essay on Economic Reforms in India is useful for students in grades 7, 8, 9, and 10 as well as those preparing for competitive exams. This lengthy essay is appropriate for students in seventh through tenth grade, as well as those preparing for competitive examinations.

In 1985, Rajiv Gandhi was sworn in as the Prime Minister of our country. Attempts were made to alter the economic sector of the country during his rule, such as boosting productivity and adopting new technology. It called for increased private-sector participation. The deregulation and liberalization of the economy began in 1991.

Since then, there have been observable fundamental and irreversible changes in the economy, government policies, business and industrial viewpoint, and Indians’ general mentality. From a product and foreign exchange deficit economy to a surplus economy; from an agricultural economy to one centered on services.

The 1980s economic collapse necessitated the adoption of economic changes, which were primarily crisis-driven. A cursory examination of the different government-implemented reforms to date reveals that they all share common goals: the reduction of fiscal debt, trade liberalization, and trade policy reforms. These necessitated the elimination of quantitative limits, the rationalization of taxation, the disinvestment of the public sector, and the restructuring of public expenditures.

The 73rd to 74th Constitutional Amendments (1995) expanded the scope of decentralization of political and economic power and devolution of fiscal authority to local entities such as the ‘panchayats’ and ‘nagarpalikas.’

This allowed the economy to be attentive to the local needs of the people and allowed the reforms’ advantages to flow down to the lower classes of society. Moreover, as a result of the software industry’s exceptional development, changes in the skilled labor market are also obvious. Not only is the skilled labor in this industry capable of meeting the high-quality requirements of developed nations, but it can also fetch remuneration commensurate with its ability.

Current economic changes in India must place a greater emphasis on resource production and management than on demand management. In addition to decreasing government obligations, disinvestment in the public sector would boost current revenue. Restructuring expenditures would reduce unneeded consumption liabilities and make them more responsive to public investment requirements.

In 2007, India experienced its greatest GDP growth rate of 9 percent, which was the culmination of liberalization. This makes India the second fastest-expanding economy in the world, behind China. The Indian economy experienced a growth rate of 8.5% in 2010-2011. Despite oscillations in the agricultural sector, Industry and Services have continued to rise steadily and have operated as twin engines driving total economic expansion. Inflation has remained moderate, and both exports and imports have increased rapidly, despite the escalating price of crude oil.

India’s food production expanded significantly as well. After the implementation of economic reforms, physical infrastructure construction has accelerated. The cycle of growth and savings has been virtuous over the years and will continue to be so for the foreseeable future. The level of poverty has decreased significantly.

Nonetheless, a comparison of the pre-reform and post-reform eras revealed a decline in labor’s confidence in the government. The number of strikes and lockouts among workers increased. This occurred because workers feared losing their employment as a result of privatization and liberalization.

Short Essay on Economic Reforms In India 200 Words in English

A brief essay on Economic Reforms in India is provided below for Classes 1, 2, 3, 4, 5, and 6. This brief essay on the topic is appropriate for children in grades 6 and lower.

The current BJP administration, led by Prime Minister Narendra Modi, pledges to promote economic sustainability while aiming for a 10% growth rate. India will be the youngest country in the world by 2020, with 64% of its people in the working age bracket. The government will pursue the clearance of pending proposals.

Additionally, it will liberalize foreign investment in critical areas. The Prime Minister has also guaranteed a policy of “maximum governance and minimal government.” After 67 years of independence, if we compare India’s performance to that of other countries throughout the world, particularly those in Asia, we see that although much has been accomplished, we still have a long way to go. We must learn from our mistakes of the past and formulate future strategies accordingly.

Our owri people succeed in a variety of fields outside the United States, yet we fail to utilise the greatest of our nation’s expertise for the advancement of our own economy. We must discover ways to provide greater possibilities for our citizens within the country and limit brain drain, which in turn leads to other types of emigration and halts the country’s progress. Despite India’s tremendous accomplishments, not enough has been done to alleviate poverty, illiteracy, and other critical problems. In both the public and private sectors, we frequently fail to employ the most efficient and effective human resources. This requires extensive rethinking. As APJ Abdul Kalam has accurately mentioned

“India will only truly shine when it shines for one and all.” 

Need for Economic Reforms

• Poor performance of the industrial sector
• Adverse balance of payments
• Rise in fiscal deficit
• Inflation
• The Gulf War

Why did India implement economic reforms?

India implemented economic changes due to the following factors:

Lack of effectiveness of the public sector

• From 1951 through 1990, the public sector had a key role in development policies.
• Nonetheless, the performance of the vast bulk of public firms was dismal.
• They were suffering enormous losses due to ineffective management.

Negative BOP when imports surpass exports

• Imports expanded at an exceptionally rapid rate, whereas exports grew at a slower rate.
• Even after establishing high taxes and quotas, the government was unable to control imports.
• In contrast, exports were extremely low due to the inferior quality and higher pricing of our goods in comparison to those of foreign countries.

Decrease in foreign currency reserves

• Foreign exchange (foreign currency) reserves, which the government ordinarily maintains to import gasoline and other essential products, fell to levels inadequate for even two weeks.
• The government was unable to repay its foreign borrowings.

Huge obligations on government

• The government spent more on various development projects than it collected in taxes.
• As a result, the government borrowed money from banks, public and international financial institutions such as the International Monetary Fund, etc.

Inflationary pressure

• There was a steady increase in the overall price level of necessities in the economy.
• To curb inflation, a new set of policies was necessary. 

Conclusion:

Due to increased private participation in the economy and the private sector’s singular focus on profit maximization, it is a fact that the reform process will fail to accomplish its socio-economic objectives. Without question, the liberalization process has diminished the significance of public sector investment.

However, it has been unable to replace the void left by the withdrawal of public sector investment in infrastructure, especially in lagging states. Clearly, this requires a reassessment of the reform process and the implementation of corrective measures.

The three-way fast lane of liberalization, privatization, and globalization (LPG) had no effect on the unemployment situation. At least one aspect of the reform process is clear: market forces do not aid the poor.

Four significant disadvantages of the reform process are

• It widened gaps between states.
• It displaced those with few or no marketable skills.
• It led to an increase in poverty and inequality.
• It failed to ensure human development, the primary indices of which are life expectancy, literacy rate, newborn mortality rate, and death rate.

Combining the economies of growth with the economies of equality and social justice is our greatest challenge. The age-old dilemma of planning has been the clash between expansion and distributional equity. 

Frequently Asked Questions on Economic Reforms