2. MEANING Of ECONOMIC REFORMS
The term economic reforms broadly
indicates necessary structural change to the
external events. it includes the function of
country’s spending to the level parallel to
its income and thereby reducing fiscal
deficit.
This require gradual reduction in import
and increase in export. These adjustment
also require market change in order to
make economy more flexible.
3. The present process of economic reform was
born out of the crisis in the economy, Which
climaxed in 1991.
The crisis compelled the government to adopt
a new path-breaking economic reforms
measures were initiated with the objective to
deal with the crisis and to take the economy
on a high growth path.
4. Increase in fiscal Deficit
Increase in adverse balance of payment
Gulf crisis
Fall in foreign exchange reserve
Rise in prices
Poor performance of public sector
6. It means to free the economy from direct control
imposed by the government.
Before 1991,Govt had imposed several types of control
on economy like industrial licensing system etc.These
controls leads to fall in economic growth.
Economic reforms were based on the assumption that
market forces could guide the economy in more
effective manner then government control.
7. Abolition of industrial licensing and
registration; according to new industrial
policy with the exception of 6 sectors
industrial licensing has been removed.
Concessions from MRTP Act.
Freedom from expansion and production to
industries.
Increase in the investment limit of small scale
industries.
8. Privatization means to 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:
A. Change in ownership: degree of
privatization judged by the extent of
ownership transferred from public to
private sector. This can have four forms:
a) Total nationalization
b) Joint venture
c) Liquidation
d) Workers Co-operative
9. B. Organizational measures: it includes variety
of measures to limit state control.
a) A holding company structure
b) Leasing
C. operational measures: Autonomy to the
operators of enterprise
10. To increase the efficiency and competitive
power of the enterprises.
To strengthen industrial management.
To earn more and more foreign currency.
To make optimum use of resources.
To achieve rapid industrial development of
the country.
11. Reduction in income burden
Increase in efficiency
Scientific management
Reduction in political interference
Encouragement of new inventions
12. Lack of social welfare
Class struggle
Increase in inequality
Increase in unemployment
Exploitation of weaker section
13. The disinvestment programmed towards
great privatization of the economy was
launched in 1991-92 with the announcement
of new industrial policy in August 1991this is
ongoing process even today
In order to make process of reforms smooth,
most of PSU’s have been sold to private
sector
14. it is defined as process associated with
increasing openness, growing economic
independence and deeping economic
integration in the world economy.
Reduction of trade barriers
Free flow of capital
Free movement of technology
15. Stage 1: Domestic company exports to
foreign countries through the dealers of
home country
Stage 2: the domestic company exports to
foreign countries directly on its own
Stage 3:The domestic company becomes an
international company by establishing
production and marketing operation in
various foreign countries
16. Globalization of markets
Globalization of production
Globalization of technology
Globalization of investment
17. Reduction of import duties
encouragement of foreign investment
Reducing custom duties
Devaluation of currency
18. It has to be true that reforms process will not
be able to achieve its socio-economic
objective, because the private sector is only
concerned with profit motive So our challenge
is to turn the new discoveries into best
weapons humanity has ever had to fight
poverty.” Acc. To Dr Manmohan Singh, “The
challenge before us is to combine the
Economics of growth with the Economics of
equity and social justice we have no option
but to walk on two legs.”
Editor's Notes
Includes Household goods and services; Health; Transport and Communication; Recreation and amusement; Education and personal care and effects.
Source: CSO
