Question

What Are Economic Reforms? Explain Its Effects on Indian Economy? Find the Answer at BYJU'S

Answer 1

Economic reforms refers to any kind of policies that seek to improve the condition of the economy. The impact of economic reforms of 1991 in Indian economy are as follows:

1. India was able to overcome the economic crisis of 1991, in a period of two years due to the economic reforms.
2. Due to adoption of LPG and devaluation of rupee, India was able to reduce its BoP (Balance of Payments) deficit and was able to attract foreign investors in the economy that led to the increase in foreign exchange reserves.
3. The GDP of India increased significantly with the new reforms.
4. Economic reforms led to an increase in competitiveness in the banking sector that allowed entry of private operators.
5. Inflation rates were reduced.

Also read:

• Economic Reforms
• MCQs on Liberalisation
• MCQs on Globalisation

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