TABLE OF CONTENTS In 1991, in the wake of a severe balance of payments crisis, India launched an economic reforms programme. The policies announced were aimed at reducing the role of the state in development and increasing the country's integration with the global economy. There has subsequently been a greater reliance on market mechanisms and a shift away from physical and quantitative restrictions and bureaucratic controls, and an active promotion of foreign investment.
The overall effectiveness of the reforms has been impressive. Gross domestic product growth has risen from 0.9 per cent in 1990-91 to 7.5 per cent in 1996-97. International trade as well as foreign investment has increased. Total trade has increased from $37.3 billion in 1991-92 to $71.7 billion in 1996-97. Foreign investment has risen from $587 million in 1992-93 to $5560 million in 1996-97.
Economic reforms are irreversible. What has emerged clearly is that almost all the main parties are committed to the liberalization process that was initiated by the Congress in 1991. The common minimum programme of the United Front coalition, which was in power between 1996 and 1998, supported - and, in some areas, even accelerated - the general direction of economic reforms. Its successor, the BJP-led government, despite its pre-poll stance of economic nationalism, enacted policy that has only furthered the liberalization process. There is a consensus among all the political parties - barring the communist parties - that the country has to modernize and compete in the global...
