India launched its market-oriented economic reforms in 1991

For this task Narasimha Rao appointed Manmohan Singh as a special economical adviser
to implement liberalisation.
The economic liberalisation in India refers to economic reforms in India that started in 1991
during the financial term of manmohan singh .
During that period finance minister Manmohan Singh started breakthrough reforms.  The
new neo-liberal policies included opening for international trade and investment, deregulation,
initiation of privatization , tax reforms, and inflation-controlling measures .

Liberalisation has done away with the Licence Raj (investment, industrial and import licensing)
and ended many public monopolies, allowing automatic approval of foreign direct investment in
many sectors.

These helped in reducing the fiscal deficit, privatization of the public sector, and increasing
investment in infrastructure
Trade reforms and changes in the regulation of foreign direct investment were introduced to open
India to foreign trade while stabilizing external loans

Points under reform policies : -

• Industrial regulation was rationalized

• SEBI is given the legal authority to register and regulate all security market
intermediaries
• Reduced tariffs from an average of 85 percent to 25 percent
• The rupee was made convertible on trade account.
• Encouraging foreign direct investment by increasing the maximum limit on share
of foreign capital in joint ventures from 40 to 51 percent with 100 percent foreign
equity permitted in priority sectors
• in 1992 , India's equity markets were opened to investment by foreign institutional
investors and
• permitting Indian firms to raise capital on international markets by issuing Global
Depository Receipts ( GDRs )
• Marginal tax rates were reduced.
• Privatization of large, inefficient and loss-inducing government corporations was initiated.

The overall direction of liberalisation has since remained the same, irrespective of the ruling party

the main objective of the Dr. Manmohan singh behind these reforms was to transform
the economic system from socialism to capitalism so that to achieve high economic
growth and industrialize the nation for the well-being of Indian citizens. Today India is mainly
characterized as a market economy because of this strategy .

advantages :
• total foreign investment (including foreign direct investment, portfolio investment, and
investment raised on international capital markets) in India grew from US$132 million in
1991–92 to $5.3 billion in 1995–96
• Cities like Gurgaon, Bangalore, Hyderabad, Pune and Ahmedabad have risen in
economic importance, became centres of rising industries and destination for foreign
investmentand firms.