Question

Explain Economic Reforms of 1991.

Answer 1

Economic reforms 1991

The year 1991 has a special significance in the Indian economy. Many economic measures were introduced to achieve the objectives of the new economic policies of the government. The economic reforms aimed at rapid industrialization. For this, the abolition of industrial licensing, allowing foreign investment, encouragement to the private sector and coexistence of the public sector and private sector were taken by the government.

The main aspects of economic reforms are as follows

(1) Liberalization - Liberalisation means moving towards a free market system. Liberalization has otherwise known as the withdrawal of regulation and

restrictions for private sectors. Private sectors are encouraged to enter into core industries which are reserved for the public sector

(2) Privatization - Privatisation generally means transforming all economic activities from the public sector to the private sector. It also refers to the setting up of private units in public utility services.

(3) Globalization -Globalisation refers to where a country draws raw materials from any source of the world and manufacture goods and services. The finished goods also find a place in the global market. Thus globalization is the linkage of the nation's markets with global markets.