1 . Explain the impact of LPG during reform period ?
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Answers
Answer:
Economic reforms have an important impact on Indian Economy. After adopted the policy of LPG. Liberlisation, Privatization and Globalization came in behavior after the economic reforms. Foreign Investors started the Investment in many sectors.
In 1991 the unemployment rate was high but after India adopted new LPG policy more employment got generated as new foreign companies came to India and due to liberalisation many new entrepreneurs started companies. Per Capita income increased due to an increase in employment.
Positive Impact of LPG on Indian Economy-
1. Increase in GDP growth rate
India’s GDP growth rate is increased. During 1990-91 India’s GDP growth rate was only 1.1% but after 1991 reforms due LPG policy India’s GDP growth rate is increased year by year and in 2015 it was recorded 7.26 and in 2015-16 it is estimated to be 7.5% by IMF.Because of the Abolition of Industrial licensing, privatisation, advanced foreign technology and Reduction of taxes India’s GDP is increased after 1991 reforms.
2. Increase in Foreign Direct Investment (FDI)-
India has already marked its presence as one of the fastest growing economies of the world. It has been ranked among the top 3 attractive destinations for inbound investments. Since 1991, the regulatory environment in terms of foreign investment has been consistently eased to make it investor-friendly.India has also firmly established itself as a lucrative foreign investment destination, with foreign capital inflows of over US$ 31 billion in 2015
3. Increase in per capita income-
In 1991 India’s Per capita Income was Rs. 11235 but in 2014-15 Per Capita Income is reached to Rs. 85533. Per Capita income is increased due to Increase in Employment, due to new economy policy of globalization and privatization many job opportunities are created so, people’s income was increased.
4. Unemployment rate is reduced-
In 1991 unemployment rate was 4.3% but after India adopted new LPG policy more employment is generated because of globalisation many new foreign companies came in India and due to liberalisation many new entrepreneurs have started new companies because of a abolition of Industrial licensing / Permit Raj so, employment is generated, and due to which India’s unemployment rate is reduced from 4.3% in 1991 to 3.6% in 2014
5. Privatization has resulted into reduction of the government's financial and administrative burden
In 1991, agriculture provided employment to 72 per cent of the population and contributed 29.02per cent of the gross domestic product.