The document discusses India's economic reforms that began in 1991 due to economic and political crises. It overviews the background of the crisis, the meaning and need for reforms, and the main features of the reforms including liberalization, privatization, and globalization. The reforms led to growth in key sectors like automobiles, agriculture, and telecommunications. A balance sheet shows that economic growth rates increased after the reforms while inflation rates decreased.

1. Presented by:
HITESH CHAWLA
YAMAN KR. SHARMA
ANJALI PANDEY
RAJ KUMAR

2. BACKGROUND
Present process of Economic reforms was launched in
July 1991 in India due to economic and political crisis:
Economic crisis include fall in foreign exchange
reserve, galloping inflation, large public and current
account deficit etc.
Political crisis include fall of two governments in a
short span of four months, from November 1990 to
March 1991. Also the assassination of Former Prime
Minister Rajiv Gandhi etc.
“CRISIS DRIVEN REFORMS”

3. MEANING OF ECONOMIC
REFORMS
The term “economic reform” broadly indicates:
Necessary structural adjustments to external events.
Functions of country’s spending to the level parallel to
its income and thereby reducing fiscal deficits.
This requires gradual reduction in import and increase
in export.

4. NEED OF ECONOMIC REFORMS
Increase in Fiscal Deficit
Increase in adverse balance of payment
Gulf Crisis
Fall in Foreign Exchange Reserve
Rise in Price
Poor performance of public sector

5. MAIN FEATURES OF ECONOMIC
REFORMS
ECONOMIC
REFORMS
LIBERALISATION
PRIVATISATION
GLOBALISATION

6. LIBERALISATION
Means to free the economy from direct or physical
controls imposed by the government.
Its multiple forms are:
Delicensing
Tax exemptions, Holidays and Concessions
Simplification and rationalization of tax rates.
Freedom to banks to enter insurance sectors
Freedom to import capital goods
Freedom to import technology

7. PRIVATISATION
Means allowing the private sector to set up more and
more of industries that were previously reserved for
public sector.
It can take in three forms:
Change in ownership
Total nationalization
Joint venture
Liquidation
Workers Co-operative

8. Continued…
Organizational Measures
A holding company structure
Leasing
Operational Measures

9. Objectives of Privatisation
To make optimum use of resources
To earn more foreign currency
To strengthen industrial development
ADVANTAGES
Reduction in economic burden
Increase in efficiency
Encouragement of new inventions

10. Globalization
Process associated with increasing openness, growing
economic independence.
Reduction of trade barriers
Free flow of capital
Free flow of technology

11. Types of Globalization
Globalization of markets.
Globalization of production
Globalization of technology
Globalization of Investment

12. Measures taken for Globalization
Increase in Limit of FDI
Reducing custom duty
Devaluation of currency
Reduction of import duties

13. REFORMS FOR GROWTH
Exchange Market Reforms
Introduced in eighth five year plan in 1993
Exchange rates were unified and trade account were
freed from foreign exchange control.
Measures were taken to simplify foreign exchange to
enhance current account convertibility

14. Reforms in Foreign Investment Regime
Foreign Investment promotion Board has been
revamped to make the rules and regulation pertaining to
Foreign Investment more transparent
Amendment of certain conditions relating to FDI, up to
100%, in single brand retail trading,
Permitting FDI, up to 51%, in multi-brand retail trading
Permitting FDI, up to 49%, in power exchanges

15. Reforms in Infrastructure Sector
Improvement in transport system through introduction
of rail based transit system in cities like Delhi, Bangalore
etc.
Hindustan Aeronautics Limited(HAL) is India’s gigantic
aeronautical organization with many privative players
coming in.

16. Impact of Economic Reforms
On Automobile Sector
During 2008-12, Industry witnessed a growth rate of 20-
25%
Export increased to 4.8 lakh units registering a growth
rate as high as 55%
On Agricultural Sector
Its contributes 13.7% to GDP of the country in 2012-13 in
comparison to that of 14.1% in 2011-12.

17. On Telecommunication Sector
Recent growth in Telecommunication has been
impressive.
Total number of telephone connections stand at 90
million(2011).
Private companies are expected to lay major role in its
growth.

18. A BALANCE SHEET OF ECONOMIC
REFORMS
PERIODS(AVERAGES) GROWTH RATE WPI INFLATION RATE
1960-61 TO 1969-70 4.0 6.3
1970-71 TO 1979-80 2.9 9.0
1980-81 TO 1990-91 5.6 8.2
1991-1992(CRISIS YEAR) 1.4 13.7
1992-93 TO 1990-00 6.3 7.2
2001-06 6.9 5.1
2008-09 6.7 8.4
SOURCE- Economic Survey of India
and Statistical outline of India

19. Courtesy
 Business Environment by A.C. Fernando
 Business Environment by Justin Paul