Question

. Why government in 1990s allowed private industries in many areas which were
earlier restricted only to government? AS,​

Answer 1

Explanation:

In the beginning of the 1990s, India faced many economic problems due to the planned socio economic setup. Some of the problems like excessive fiscal deficit and balance of payment deficit were so severe that the country needed a U turn in its economic policies. Inflation was out of control from '60s, foreign exchange was at an all time low, Gulf Crisis and perpetual disturbance at our international borders were pushing India towards a downward economic spiral. Only two ways were left in from of the government of the day to deal with the ongoing crisis, either take the route of constitutional provision of Financial Emergency or Change the economic setup of closed government authority to open market system. This way the government opened sectors for private players which were otherwise solely handled by the administration of the day. The government was thus able to focus its energy, time and resources to more important priority areas while leaving business in the hands of the people (national or foreign). This also led to increased competition, controlled rate of inflation, brought foreign reserves, gave us jobs and thus proved to be a healthy push for the economy

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