Why government in 1990s allowed private industries in many areas which were earlier restricted only to government?
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Secondary SchoolEconomy6 points
Why did the government in 1990's allow private industries in many areas which were earlier restricted only to government??
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Ask for details FollowReport by Diwakar29oct07.10.2017
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ManishaSahuAmbitious
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!
Secondary SchoolEconomy6 points
Why did the government in 1990's allow private industries in many areas which were earlier restricted only to government??
Advertisement
Ask for details FollowReport by Diwakar29oct07.10.2017
Answers
ManishaSahuAmbitious
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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Heya....
India didn't allowed the privatization before 1990 because ....
* There were many economical crises...
* Not any experience of all this...
But after 1990 govt thought about the still backward situation and financial issues of our country so it replaced restrictions from freedom...
Reasons were....
* To cop up fiscal deficits...
* To extend foreign exchange reserves...
* To be globized with world...
India didn't allowed the privatization before 1990 because ....
* There were many economical crises...
* Not any experience of all this...
But after 1990 govt thought about the still backward situation and financial issues of our country so it replaced restrictions from freedom...
Reasons were....
* To cop up fiscal deficits...
* To extend foreign exchange reserves...
* To be globized with world...
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