Why is the year 1991 so crucial in the recent history of India?

In 1991, the Indian economy was facing an economic crisis due to the balance of payment issue. The Indian Government decided to open up the Indian economy and make it market oriented. India focused on Liberalisation, Privatisation and Globalisation thus ushering in the economic development of India. You can read about the Balance of Payment Crisis, 1991 – Causes and Measures to Control it in the given link.

In 1991, the Indian rupee was devalued in two steps, first on 1st July and again on 3rd July. 

Further readings:

1. Forex Reserves – Meaning, Importance, Advantages (Notes for UPSC IAS exam)
2. New Economic Policy of 1991 – Objectives, Liberalisation, Privatisation, Globalisation