Major Economic Reforms from pre-independent era to post independent era is dealt with.

1. ECONOMIC REFORMS Presented By : AYSHA
SHADHA

2. MEANING:
ECONOMIC REFORM IS A SET OF POLICIES,RULES
AND REGULATIONS TO ACHIEVE ECONOMIC
GROWTH.
Or in other words,
ECONOMIC REFORM CAN BE DEFINED AS ANY CHANGE THAT AFFECTS
THE ECONOMY WITH AN EMPHASIS ON A POSITIVE GROWTH.
But here,we’ll deal with the economic reforms,deregulations,policies
initiated by the government of India

3. WHY WE NEED ECONOMIC
REFORMS :
• Poor Performance of the Industrial Sector(stagnant
growth)
• Adverse Balance of
Payments(imports>exportsdependent to others)
• Rise in Fiscal Deficit(govt. income<expenditurehuge
debtor)
• Inflation
•Fall in Foreign Exchange
• The Gulf War(Crisis-1990)
• Chronic Unemployment
• Corruption

4. TYPES OF ECONOMIC REFORMS:
1) STRUCTURAL REFORMS-deals with reforms that free the
economy from the governmental controls(minimum
government, maximum governance).Emphasizes more on
boosting the 8 core sectors
2) FISCAL REFORMS-addresses both revenue and
expenditure related policies.it rrefers to the authoritative
decisions taken by the government in matters of
taxation,expenditure,exports,investment ,etc
3) INFRASTRUCTURE REFORMS-emphasis is more on
boosting the infrastructure through these policies
4) CAPITAL AND MONEY MARKET REFORMS-it helps
improve banking,investment,trade,market

5. MAJOR ECONOMIC REFORMS:
Liberalization
Privatization
Globalization

6. LIBERALISATION
means movement towards a
free market system.
withdrawal of regulation and
restrictions for private sectors.
Private sectors are encouraged
to enter into core industries
which are reserved for the
public sector

7. HOW DO WE LIBERALIZE?
•allow determination of interest rate
by the commercial Banks itself not
by RBI.
•Increase the investment limit for the
Small Scale Industries (SSIs)
•By giving the freedom to import
capital goods
•By letting Indian industries free to
buy machines and raw materials
from foreign countries to do their

8. PRIVATIZATION
means transforming all
economic activities from
public sector to private sector
also refers to the setting up
of private units in public utility
services

9. HOW DO WE PRIVATIZE?
•Selling shares of PSUs
•By Disinvestment in PSUs
•By Minimisation of Public
Sector:

10. GLOBALISATION
the linkage of nation’s markets
with global markets.
Raw materials finished goods
and sevices find a place in the
global market.
Reduction in tariffs and trade
restrictions helps to enhance
globalisation

11. HOW DO WE GLOBALIZE?
•Allowing more Foreign
Investments
•Allowing MNCs
•Easing of import export rules
•Reduction of tarrifs

13. THE CRISIS OF 1991 IN SHORT:
ForEx Reserve sufficient for
3 weeks only .
High Fiscal deficit
No attention on Exports
Adverse Debt crisis

14. PV NARASIMHA RAO Former Prime Minister of
India(1991-96)

15. THE SILENT DOERDR.
MANMOHAN SIGH
Former Finance Minister of
India (1991-96)

16. NEW ECONOMIC POLICY 1991
FEATURES:
Industrial licensing : Abolition of Industrial Licensing for all projects except for a short list
of industries
Monetary and Financial Sector reforms : done away with interest rate distortions and
rationalized the structure of lending rates.Narasimhan Committee played a vital role in
this.
De-reservation of Public sector: Sectors that were earlier exclusively reserved for public
sector were reduced.
Disinvestment of Public Sector: Government stakes in Public Sector Enterprises were
reduced to enhance their efficiency and competitiveness.
Liberalisation of Foreign Investment: This was the first Industrial policy in which foreign
companies were allowed to have majority stake in India.
MRTP Act : MRTP (Monopolies and Restrictive Trade Practices) Act was amended to remove
the threshold limits of assets in respect of MRTP companies and dominant undertakings.
Increase in the Importance of Small Industries: Efforts have been made to give importance
to the small industries in the economic development of the country.
FERA Restrictions Removed: Foreign Exchange Regulation Act (FERA) has been replaced by
Foreign Exchange Management Act (FEMA). It regulates the foreign transactions. These
transactions have now become simpler.

18. EXAMPLES OF ECONOMIC
REFORMS
 FIVE YEAR PLANS
 GST Introduced
 Monetary Policy Committee
got appointed
 DEMONETISATION
 DISINVESTMENT of PSUs

19. DISADVANTAGES OF ECONOMIC
REFORMS:
•Infant industries dominated
by Foreign Industries
•Demand for domestic product
decreases
•Economy Experience balance
deficit due to excess import
•Domestic producer cannot
compete enough

20. WHAT WE DEALT WITH:
WE DEFINED ECONOMIC REFORMS,STATED THE NEED FOR
ECONOMIC REFORMS,THEN TYPES IN BRIEF.
WE DEALT WITH MAJOR ECONOMIC REFORMS LIKE LPGz,and
the process of doing the same.
WE GLANCED THROUGH THE POST-INDEPENDENCE AND PRE-NEP
PERIOD
HISTORY AND STRESSED OVER WHAT WENT WRONG IN STABILIZING
THE ECONOMY
FURTHER,WE DELVED DEEP INTO THE CRISIS OF 1991,THE
FATHER OF MODERN ECONOMIC REFORMS-PV NARASIMHA
RAO,AND THE SILENT DOER AND ONE OF THE FINEST ECONOMISTS
WE HAVE-DR.MANAMOHAN SINGH,THEIRWAY OF DEALING
THROUGH NEP ETC.
DISCUSSED SOME EXAMPLES AND ALSO MENTION SOME
DISADVANTAGES OF ECONOMIC REFORMS IF ANY.