Economic and Policy Reforms in India

India initiated a series of economic reforms in July 1991, that were unprecedented in their scope and magnitude. Decades of tight controls over industry, trade and finance made way almost overnight for a liberal, market-friendly economic environment. The guiding philosophy of the reform process was to seek out the appropriate balance between the market and the state, in the pursuit of development. A sector-specific theoretical approach to reforms is followed in this book along with empirical work in each sector. The chapters cover: finances. The financial sector. Trade and balance of payments. The industrial sector. The agricultural sector. Each chapter systematically goes about answering a common set of questions: What would the ideal characteristics of the sector be in India’s current economic context? Which reforms have contributed to steering that sector towards that ideal? What impact have these reforms had on performance? What further reforms are necessary? What emerges is a comprehensive and integrated set of sector analyses that highlight the issues involved in the reform process, evaluate reforms until the late 1990s, and provide an analytical basis for the future reform agenda. While the diversity of the chapters reflects the specific conditions of each sector, the book as a whole provides a panoramic view of the Indian reform process. The final chapter points to the need of the hour for the next wave of reforms – restoration of fiscal health and acceleration in infrastructure investment. A variety of measures are prescribed for achieving an improvement in economic growth – imposition of higher user charges for public services such as power, water and transport; widespread privatisation at both central and state levels; opening insurance, provident fund and pension funds; enhancing private sector competitiveness; and agriculture reforms.