ation have blamed the slowdown on

worse than 1991. And 'big bang reforms' of the same kind of 1991is not the only solution that India has.
First of all one has to understand that the two situations one in 1991 and other in 2013 are completely different.
According to D. Subbarao, ex RBI Governor, fundamentals of the economy have changed over the time.
In 1991, India was a closed economy with 'Red tape mafias'. Now Indian economy follows the principles of LPG. In
1991, India had the foreign exchange reserves that could cover the imports for two months only whereas now we
can provide for eight months import cover.
In 1991, rupee was depreciated by 20% but today exchange rate is largely dependent on market and therefore, able
to absorb shocks. External sector vulnerability indicators of 1991 was much more deteriorated than that of the 2013.
The most important factor which defies any need of reforms is the condition of the western economies. In 1991,
western economies were looking for expansion. They were thriving to catch new markets from Africa and Asia
region. Their economies were healthy. But today, western economies are looking inward. The subprime crisis of
2008 has been severe attack on developed economies. Most of the developed economies have faltered after 2008.
They are not enthusiastic in investing in other countries as they were in 1991. EU, US and Japan are trying to lift
themselves up.
India has to understand that even if India gets financial help from the global economies, it is going to be a double
edged sword. Unless it is used effectively to increase the domestic production and export, the foreign financial help
will be a foreign trap. Government should learn that this trap will become more complex with time. Industrialists
which use the cheaper global finance and scarce resources like spectrum, coal, land, iron should also try to stop
falling into the trap and playing the stock games with the help of political class.
India should work towards insulation, not isolation, from the global financial ups and downs. This could easily be
done with the help of domestic sources. India's coal and iron extraction can easily be increased by $20 billion by
allowing higher coal and iron extraction. Over last five years, India's coal imports swell up by $10 billion. This
unnecessary outflow of dollars can be easily avoided because India has the largest coal reservoir in Asia.
Government should convince the Supreme Court the benefits of allowing coal extraction in Goa and Karnataka.
Under the supervision of the Supreme Court the coal exports can easily fetch India few important foreign exchange.
India should look to make Food Security Bill more rounded. Food Security Bill will make the poor insulated from
rising food inflation. This would make RBI's work easier and less complicated as RBI would get more space to
focus on manufacturing inflation. RBI would, then, take manufacturing inflation as the basis for structuring
monetary policies and ease the interest rates for industry.
Government should also take steps to regulate the import of gold. Curtailing gold imports by $20 billion i.e. to the
level of 2011-import will surely ease the pressure on economy.
There's no need of 1991 like reforms at all. 67% of the economy is covered by service sector which is less, more
stable. Financial markets are more mature, diverse and deep.
The impact of ten years of gradualist economic reforms in India on the policy environment presents a mixed picture.
The industrial and trade policy reforms have gone far, though they need to be supplemented by labor market
reforms which are a critical missing link. The logic of liberalization also needs to be extended to agriculture, where
numerous restrictions remain in place. Reforms aimed at encouraging private investment in infrastructure have
worked in some areas but not in others. The complexity of the problems in this area was underestimated, especially
in the power sector. This has now been recognized and policies are being reshaped accordingly. Progress has been
made in several areas of financial sector reforms, though some of the critical issues relating to government
ownership of the banks remain to be addressed. However, the outcome in the fiscal area shows a worse situation at
the end of ten years than at the start.



GDP growth rate
Since the economic liberalisation of 1991, India's GDP has been growing at a higher rate.
Year Growth (real) (%)
2000 5.6
2001 6.0
2002 4.3
2003 8.3
2004 6.2
2005 8.4
2006 9.2
2007 9.0
2008 7.4
2009 7.4
2010 10.1
2011 6.8
2012 6.5
2013 4.4

Companies
47 Indian companies were listed in the Forbes Global 2000 ranking for 2009. The 10 leading companies were:

World
Rank
Company Logo Industry
Revenue
(billion $)
Profits
(billion
$)
Assets
(billion $)
Market
Value
(billion
$)
121 Reliance Industries
Oil & Gas
Operations
34.03 4.87 43.61 35.95
150 State Bank of India

Banking 22.63 2.23 255.86 12.75
152
Oil and Natural Gas
Corporation

Oil & Gas
Operations
24.04 4.95 35.35 28.91
207 Indian Oil Corporation

Oil & Gas
Operations
51.66 1.97 33.64 10.20
317 NTPC

Utilities 9.63 1.86 24.58 29.70
329 ICICI Bank

Banking 15.06 0.85 120.61 7.14
463 Tata Steel

Materials 32.77 3.08 31.16 2.46
508 BhartiAirtel
Telecommu
nications
Services
6.73 1.59 12.28 23.63
582
Steel Authority of India
Limited
Materials 9.82 1.89 10.54 6.14
689 Reliance Communications

Telecommu
nications
Services
4.26 1.35 19.31 6.27
Source: Forbes Global, 2000
Conclusion:
Since 1991, there have been number of changes done by different government but for the last 10 years due to the
international scenario and inappropriate policy environment the growth achieved was not upto the mark however,
the new government is giving indications of positive policy changes therefore India inc. is looking forward for
better economic growth and development.

Reference:

EconomicLliberalization in India (n.d.),Retrieved
fromhttp://en.wikipedia.org/wiki/Economic_liberalisation_in_India


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