Question

did the Indian adopt economic Reforms ? Explain detail

Answer 1

(i) Rise in Prices:

Price rise continuously in India. The inflation rate increased from 6.7% to 16.7%.

Due to inflation country’s economic position became worse.

(ii) Rise in Fiscal Deficit:

Due to increase in non- development expenditure fiscal deficit of the Govt. had been increasing. Fiscal deficit means difference between total expenditure and total receipts minus loans. 

(iv) Iraq War:

In 1990-91, war in Iraq broke, and this led to rise in petrol prices. The flow of foreign currency from Gulf countries stopped and this further aggravated the problem.

(v) Dismal Performance of PSU’s (Public Sector Undertakings):

PSU’s are enterprises wholly owned by Govt. have invested crores of Rs. in these enterprises. These are no performing well due to political interference and became big liability for Govt.