1991 : The Economic Reforms

1991

The Economic Reforms

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• Today,we live in "MODERNISED INDIA". This modernisation is infact a gift to our generation by the economic crisis that our country underwent in the near past.
• The drastic changeover from Ambassador & Fiat cars to Jaguar, Mercedes & Audi cars. The changeover from Doordarshan to Multilingual channels,and from  Landline to Smartphone all of these are some of the features of Modernization.
• Here is the story of economic revolution of India, that changed our economy never like before and never like again.

1. Indian Economy before 1991

• Till 1991 India had been a closed economy,with almost negligible Foreign Direct Investment.
• The GDP of India till then was about 586212 crore. The 30 share sensex was lingering somewhere around 1000.
• At that time, government used to fix the value of dollar,it also used to fix the prices at which the industrial products would be sold.
• Thus there was no liquidity in the market.

2. The Economic Crisis

Jagran Josh

• With beginning of year 1991, economic conditions of India worsened. India had only enough money to import the crude oil form the Gulf nations for next 7 days. It meant that after 7 days Indians would be deprived of Petrol,Disel & Cooking Gas Cylinder.
• The International Monetary Fund kept on advising India since 1989 to change there economic policies, but India didn't took firm steps for the needful.
• Thus the World Bank & IMF stopped giving  any kind of financial assistance to India.

3. Change in Political Policies

• India always had good relations with Gulf Nations due dependency of crude oil. During the course of the Gulf war, America adviced India to help them and get economic assistance from IMF. For the sake of stabilising the economy...India compromised its Political relationship.
• India was left no options other than mortgaging the gold from RBI . Thus 21,000 kg gold was airlifted to The Bank of Switzerland, followed by mortgaging additional 47,000 kg gold in the Bank of London and Japan. India recieved an economic assistance of 1100 crore.

4. Political changeover and Singh's Plan

During this Economic Crisis political changeover took place,P.V.Narsimha Rao became the new PM of India,while Manmohan Singh was appointed as the Finance Minister.

While presenting the first budget of his career, Manmohan Singh said, 

" There is no any power in this world who can stop an idea who's time has come!!!!

With this the economic policies of India were changed. India was converted to a

Mixed Economy, Liberalisation - Privatization - Globalisation was accepted,this changed the face of our economy forever.

Conclusion:

• Today India is on the verge of being a 3 trillion dollar economy,FDI is having a huge bloom,there is enough liquidity in the market,and most importantly we people are enjoying the change similarly like other international communities.
• But the most important question to be asked now is.......

• Have we progressed upto the mark?
• Are we successful to eradicate poverty???
• Is there an equal opportunity given to everyone to achieve a good lifestyle???
• Or should we have to face any other economic crisis to solve the rest of problems???

References:

1.https://en.m.wikipedia.org/wiki/1991_Indian_economic_crisis

2.https://www.conduiraonline.com/index.php/detail/413-numbers-on-indian-economy-before-and-after-1991-reforms