Question

what are the reasons that compel Indian economy to form the economic reforms of 1991?​

Answer 1

Answer: Main Reasons for Economic Reforms in India

(i) Rise in Prices:

(ii) Rise in Fiscal Deficit:

(iii) Increase in Adverse Balance of Payments:

(iv) Iraq War:

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

(vi) Fall in Foreign Exchange Reserves:

Explanation: I hope this helps and please mark me as brainiest.

Answer 2

The economic reforms in India was started in 1991,by PV Narsimha Rao(PM) and Mahmohan Singh( finance minister). At that time India was facing economic crises. Since been independence, India had only been able to maintain growth rate of 3-3.5% and our capital growth rate were worse at around 1.3%.there were lots of reasons for it:

• Financial burden of the partition.
• Wars in 1965,1972,1962 also a big reason of economy crisis.

• Since independence India drove a centralized economic model followed in Soviet Union, outcome of this model was to give rise to extensive bureaucracy, trade barrirs and unnecessary restrictions.

• India was facing food shortage and there were mass starvation in the States like Bihar.

• Farmers are struggling to met production demands.

• India was facing high deficits due to high external borrowings and inflation making the condition worst .

Above was the conditions which compelled India towards economic reforms.