why did india undergo economic reforms in 1991?
Answers
Explanation:
India started having balance of payments problems since 1985, and by the end of 1990, the state of India was in a serious economic crisis. ... Most of the economic reforms were forced upon India as a part of the IMF bailout. A Balance of Payments crisis in 1991 pushed the country to near bankruptcy.
Explanation:
The economic liberalisation in India referred to the economic liberalisation of the country's economic policies, initiated in 1991 with the goal of making the economy more market- and service-oriented, and expanding the role of private and foreign investment.[1][2] Specific changes include a reduction in import tariffs, deregulation of markets, reduction of taxes, and greater foreign investment. Liberalisation has been credited by its proponents for the high economic growth recorded by the country in the 1990s and 2000s. Its opponents have blamed it for increased inequality and economic degradation. The overall direction of liberalisation has since remained the same, irrespective of the ruling party, although no party has yet solved a variety of politically difficult issues, such as liberalising labour laws and reducing agricultural subsidies.[3] There exists a lively debate in India as to why the economic reforms were not rolled back after 1991 although earlier attempts to reform the economy were either abandoned (in 1966) or carried out with stealth (1980s)[4] . The debate also exist on whether and to what extent the reforms have been beneficial to the people of India.[5][6] According to the Discursive Dominance Theory of economic reforms sustainability, economic reforms become sustainable when the dominant social discourse in the country regarding the preferred mode of economic governance (i.e., the discursive conditions) tip against the existing paradigm under exceptional circumstances. The discursive conditions, according to the theory, are determined based on eight factors: the dominant view of international intellectuals, illustrative country cases, executive orientations, political will, the degree and the perceived causes of economic crisis, attitudes on the part of donor agencies, and the perceived outcomes of economic reforms[7].
Indian government coalitions have been advised by the IMF and World Bank to continue liberalisation. Before 2015, India grew at a slower pace than China, which had been liberalising its economy since 1978.[8] In 2015, India's GDP growth outpaced that of China.[9] The McKinsey Quarterly stated that "removing major obstacles would free India's economy to grow as fast as China's, at 10% a year".[10]
There has been significant debate, however, around liberalisation as an inclusive economic growth strategy. Income inequality has deepened in India since 1992, with consumption among the poorest staying stable while the wealthiest generate consumption growth.[11] India's gross domestic product (GDP) growth rate in 2012–13 was the lowest for a decade, at just 5.1%,[12] at which time more criticism of India's economic reforms surfaced; it apparently failed to address employment growth, nutritional values in terms of food intake in calories, and also export growth—and thereby was leading to a worsening current account deficit compared to the period prior to reform.[13]
HOPE IT WILL HELP YOU.......
PLZ MARK AS BRAINLIEST ANSWER...............