India has completed 30 years of the liberalization regime. Over the years India has become one of the fastest-growing economies in the 21st century and the reforms agenda continues to be in focus to revive economic growth. Liberalization provides greater autonomy to the business enterprises in decision-making and eliminates government interference.

Significant changes since 1991:

  1. Fiscal stabilization: Abolition of export subsidies, FRBM Act, budget support to loss-making public-sector units, banning the use of ad-hoc treasury bills.
  2. Relaxation of foreign investment norms to attract FDI
  3. Tax rate reforms like VAT, GST, reduction of corporate taxes, rationalization of tax slabs, etc.
  4. Financial sector reforms – Autonomy to PSBs, giving teeth to SEBI, allowing the use of global depository receipts, etc.
  5. Reforms in the exchange rate policies – full current account convertibility was introduced in India.
  6. Although the growth rate has increased, the fruits of development haven’t been equitably distributed because of a sharp rise in inequality.

Economic situation during the pandemic

  • Unemployment: India’s unemployment rate sharply rose to 7.11% in 2020.
  • India’s debt to GDP ratio increased from 74% to 90% during the COVID-19 pandemic.
  • India’s Gross Domestic Product (GDP) contracted 7.3% in 2020-21, as per provisional National Income estimates released by the National Statistical Office.

Steps were taken for Economic revival:

  1. Atmanirbhar Bharat Abhiyaan
  2. PM Garib Kalyan Yojana
  3. PLI schemes for multiple manufacturing sectors
  4. Credit guarantee schemes for MSME, NBFCs
  5. An Rs.20 lakh crore revival package. 

Atmanirbhar Bharat