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ECONOMIC

REFORMS
SINCE 90’S

By,
Parth Purohit-Durva Shastri
Agenda
 Introduction
 Major Causes
 Role Of Manmohan Singh
 Major economic reforms
 Significant Consequences
 Various Sectors Affected
 Conclusion
Introduction
 The term ‘economic reforms’ refers to
policy reforms undertaken by the central
govt. since 1990 to attain certain
significant achievements through the
main approaches which are as follows:
 Stabilization
 Restructuring
 Globalization


Major Causes
 Increase in fiscal deficit
 Deficit in Balance of Payment
 External Borrowings
 Mounting Inflation Rate
 Failure of the public sector
 Industrial licensing policies
 Gulf Crisis
Role Of Manmohan Singh

 Wide ranging tax reforms


 Containment of defence equipment
 Cuts in fertilizers
 Inward oriented trade policy
 Exchange rate devalued
Major Economic Reforms
 Fiscal Reforms:
Reducing the Fiscal Deficit
Banking Sector
 Import Licensing
 Export Orientation
 Tax Reforms
Direct Tax
Indirect Tax
Resource Generation through Divestment
 Structural Economic Reforms
Reorientation of Planning

Banking Reforms
 Changing in rate SLR and CRR
 Entry of Public and Private Sector in
capital market
 Operational Flexibility
 Relaxation in Licensing of Private Bank
 Improve standard of supervision , audit
and technology
 Interest rate deregulation and financial
repression.


Industrial Reform
 Industrial licensing
 Foreign Technology
 MRTP limit
 Technological Development
 Development of small scale industries
 Right of Labor
 Foreign Investment
 Self reliance
The Next Generation
Reforms
 Political Reforms for Good Governance
 Re-engineering the Role of the government
 Administrative and Legal Reforms
 Strategic Management of the Economy with a
focus on knowledgebase
 Fiscal Prudence
 Agricultural Sector Reforms
 Industrial Restructuring
 Labour Sector Reforms
 Foreign Trade and Outward Investment Policies
 Financial Sector Reforms
Significant Consequences
 Higher rate of growth
 Rapid growth of secondary and tertiary Sectors
 Increase in Export and Imports
 Improved Balance of Payments
 Rise in value of Rupee
 Less reliance on foreign borrowings
 Overall development of Indian economy
Various Sectors
Affected
Growth Rate
Sector Wise Growth Rate
Indicators Of External
Sector
Year Growth of Exports- Growth of Imports- Exports/ imports
BOP(%) BOP(%) (%)

90-91 9 14.4 66.2

95-96 20.3 21.6 74

00-01 21.1 4.6 78.5

2005-2006 23.4 32 67
Balance Of Payment
WPI Inflation Rate
Foreign Exchange Reserves

Year Gold Foreign Currancy

80 - 81 370 5850
90 - 91 3496 2236
2000 - 2001 2725 39554
Macro economic Indicators
Indicators 1989-90 1994-95 1999-00 2000-01 2001-02 2002-03
A. Growth of GDP (%) 5.6 6.3 6.1 4.4 5.6 4.4

B. GDP Growth by Sectors (%):

i. Agriculture & Allied 2.7 4.9 0.3 -0.4 5.7 -3.1

ii. Industry, of Which Manufacturing 6.7 8.3 4 7.3 3.4 6.1

iii. Services 6.7 6 10.1 5.6 6.8 7.1


C. Inflation Rate (WPI Index (%)) 9.1 10.4 4.8 2.5 5.2 3.2

D. Current Account Balance as % of -3.1 -1.1 -0.5 -0.5 na


GDP
E. Foreign Exchange Reserves (US $ 3.37 19.65 35.06 39.55 51.05 69.89
Bn.)
F. Exchange Rates (Rs/US $) 16.6 31.4 43.33 45.51 47.69 48.44

G. Rate of Growth of :
i. Exports (%) 18.9 18.4 10.8 21 -1.6 20.4
ii. Imports (%) 8.8 22.9 17.2 1.7 1.7 14.5
iii. Exports as % of GDP 6.4 9.6 9.1 10.4 9.9

iv. Imports as % of GDP 9.3 10.5 12.4 11.8 11.6 na

H. Fiscal Deficit as % of GDP 7.9 4.7 5.4 5.6 5.9 5.5

I. Revenue Deficit as % of GDP 2.6 3.1 3.5 4.1 4.2 3.9

J. Saving Ratio as % GDP 22.3 24.9 24.1 23.4 24 na

K. Investment as % of GDP 24.9 25.4 25.2 24 23.7 na


C.R.R
Bank Rate
Conclusion
♦ Reforms have put the Indian economy on a
higher growth path.
♦ Equally important to resolve the immediate
liquidity problem.
♦ To restore the economy on the path of rapid
and healthy economic growth.


Bibliography
 Ministry Of finance
 Vikalpa- The Journal for Decision Makers
 Books Referred;
 Indian economy reforms Since 1990
 Indian economy since 1945
 Indian Economy
 Indian Economic crises
 Role of Manmohan singh in Economic reforms
 www.Wikipidia.com
 www.Google.com
 www.planningcommision.gov.in
 www.rbi.org.in
 www.slideshare.com
 www.sribd.com

Thank you