20 YEARS OF ECONOMIC REFORMS

INTRODUCTION One of the brightest jewels in the crown of the Indian Economy was the Economic Reforms of 1991.India- The caged Tiger, got opened up in 1991 and today 20 years down the line it is the latest Asian Tiger. Economic reforms of 1991 made this possible. India's centralizes planning, govt. ownership, self sufficiency , inward looking policy had made India caged. But this functioning of India Economy during 1980s was marked by growing macroeconomic imbalances in the form of high fiscal deficits, high level of current account deficits, and increasing levels of external debt, besides a repressive and weakening financial system. A large growing finical deficit with sizable component of monetised deficit, resulted in pressure on money supply and inflation. These imbalances, in turn, spilled over to the external sector in form of a large and unsustainable current account deficit giving rise to sizable public debt, both domestic and external. All these culminated in an unprecedented external payment crisis in 1991.And Economic Reforms of 1991 took place.

DATA There has been no primary data for this particular topic as it covers the Macroeconomy not Micro. Secondary data has been used like, websites of GOI s different ministry, newspapers,GOI s publications, Economic survey.

OBJECTIVE The primary objective of economic reforms in India is to have an over all acceleration of economic growth along with rapid elimination of poverty. Poverty- The planning commission which is the nodal agency for estimating the number and proportion of people living below the poverty line(BPL) at national and state levels, separately for rural and urban areas, makes poverty estimates based on a large sample survey of household consumption expenditure carried out by the National Sample Survey Organization (NSSO) after interval of approximately five year.The ministry of Rural Development has been conducting the BPL census to identify individual households below the poverty line in rural areas while ensuring that the total number of such households corresponds to the planning commission estimates. The methodology of estimating poverty and identification of BPL households have been a matter of debate. Two committees under the chairmanship of Prof. Suresh Tendulkar and Dr. N.C Saxena have submitted their reports on the methodology for estimation of poverty and methodology for conducting BPL census in rural areas ,respectively. Further, an expert group under the chairmanship of Prof.S.R Hasim has been set up to recommend methodology to identification of BPL families in urban areas. After all these different committees the

planning commission has accepted Tendulkar committees report on poverty which defines the poverty line in terms of calorie intake norms which are 2100 calories/ energy daily for urban and 2400 for rural population.
Table 1 Poverty Rates Decline Year Poverty ratio, % 199394 45.3 200405 37.2 200910 32.0

Source: Government of India, Economic Survey 2011

IMPORTANCE Economics reforms enabled growth induced govt. programmes to eliminate poverty but at the same time social n economical growth was taken care of. like:

1)Agricultural Reforms- Agriculture is backbone of Indian Economy.Though the share of agriculture in national income has come down. But still agriculture sector provides livelihood to 65 to 70% of total population. Various important industries in India find their raw material from agriculture. A series of policy initiatives have been undertaken in this sector as well. Like:-

1. Land Reform Programmes : Elimination of intermediaries, Tenancy Refroms, Determination of ceiling of holdings per family and to distribute surplus land among landless people,consolidation of holdings. 2.Minimum support price of Agriculture products : MPS announced by govt. is that price at which govt. is ready to purchase the crop from the farmers directly if crop prize becomes lower to MPS. MPS is announced for 24 major crops. The main objective of it is to prevent fall in prices in the situation of over production. And to protect the interest of farmers by ensuring them minimum price for their crops in the situation of a price fall in market. 3.National Food Security Mission : The dept. of agriculture and cooperation, Ministry of agriculture, has launched a centrally sponsored scheme on NFSM in pursuance of the productionof rice, wheat and pulses by 10,8 and 2 million tonnes, respectively, over the benchmark level of production.The mission covers 312 districts in 17 states. The mission aims at increasing foodgrains production of above crops through area expansion and productivity enhancement, restoring soil fertility and productivity, creating employment opportunities, and enhancing farm level economy to restore confidence of farmers.

4.Rashtriya Krishi Vikas Yojana : RKVY is a flagship scheme of govt. The areas focus in RKVY are seeds, fertilizers, horticulture, farm mechanization, extension, crops,marketing and cooperatives. Besides states eve stepped in activities in the animal husbandry, dairy and fisheries sectors. 5. New National Agriculture Policy : Union govt. has announced new national agriculture policy in year 2000.This policy has has planned under the provision of world trade organization so as to face the challenges of agriculture sector. This policy gives emphasis on promoting agricultural export after fulfilling domestic demand. NNAP has Rainbow revolution in it which includes Green, white, yellow, blue,red,golden, grey,black, silver and round revolution. 6.Second Green revolution has also been adopted in 11th five year plan. 7.National Holticulture Mission : NHM launched in 2005-06 for holistic development of this sector ensuring horizontal and vertical linkage with the active participation.

2)Banking Sector Reforms - The Narasimhan Committee worked out on the road map of banking sector reforms.The successful implementation of its various recommendation has given a new dynamism to the banking sector since 1991. Micro credit, routed through self help groups (SGHs), has immersed as a viable credit channel to the poor as their access to conventional credit chennels is constrained by the requirement of collateral and high transaction cost. India has adopted a multi-agency approach for the development of its micro finance programs.All the major credit institutions, viz. commercial banks, co-operative banks,regional rural banks (RRBs) along with non governmental organizations (NGOs) have been associated with the micro finance program. The role of the delivering agents and their interface has led to alternative models of micro finance.

3)Social Sector Reforms - This reforms have actually made difference in each individuals life.

1.The right of children to free and compulsory education act 2009 . 2. Sarva Shiksha Abhiyan : A national flagship program launched in 2001 to cover entire country with special focus on educational needs of girls,SCs/STs and children in difficult circumstances.The SSA has a special focus on girls and childrens from weaker section.
Table 2 Literacy Rate Accelerates

Year Overall Literacy %

195051 196061 197071 198081 199091 200001 18.3 28.3 34.4 43.6 52.2 64.8

201011 74.0

Source: Government of India, Census of India 2011

3.National Rural Health Mission : Launched in 2005 to provide accessible, affordable and accountable quality health service even to the poorest household in remotest rural region. 4.Janani Suraksha Yojana : It aims to provide an integrated package of obstetric care services to expected mothers throughout her pregnancy period,including antenatal care, childbirth and immediate postpartum period,through a coordinated medical care and delivery system. 5.Awas yojana : Indira Awas Yojana, Rajiv Awas Yojana,Valmiki Ambedkar Awas yojana all these aimed at providing shelter to BPL families. Flagship programme for rural housing. 6.Rajeev Gandhi Gramin Vidyutikaran Yojana : The scheme aims at ensuring electricity to all rural households and providing free electricity connection to families below the poverty line. 7.Rural Drinking Water Supply Programme : Clean drinking water is a basic necessity of life.That has been taken care by this programme. Table 3 Households access to safe drinking water Year 1981 1991 2011 In % 38.2 62.3 77.9

Source: Government of India, Economic Survey 2011

4)Infrastructural Reforms - Policy makers have worked on the problems of infrastructure policy for over a decade. There has been a substantial progress in many areas.

1. India Infrastructure Finance Company Limited : IIFCL was incorporated in 2006 with paid up capital of Rs.10cr and an authorized capital of Rs,1000cr. 2.Railways and Roads : It carries more than 95% of total traffic generated in the county. Indian Railway Catering & Tourism Corporation (IRCTC) was incorporated in 1999 as a govt.company with the objective of upgrading and managing rail. Facilitating linkage in all reran areas n providing better service to all section of population. National Highway Development Project(NHDP) has been undertaken by National Highway Authority of India for improvisation of highways n extending them to all parts of countries. Pradhan Mantri Gram Sadak Yojana (PMGSY) launched in 2000, fully centrally sponsored scheme to

provide rural connectivity to unconnected areas with population of 500 or more persons. Under this program about 4.19 lakh km. roads have benefited 1,02,979 habitations by end of nov.2010. At the same time Asian Development Bank have approved $180million & World Bank have given a loan of $500million for Rural Road program. 3. Ports and Inland Water Transports : There are 13 major ports and 200 minor ports along India's 5600 km coastline. IWT is estimated that total of 14,544km of waterways could be used for passengers and cargo movement. As IWT is energy efficient and environmentally clean and economical mode of transport which can be used for poor people. 4.Postal Network : India has the largest postal network in the world. On an average, a post office servers an area of 21.20 sq.kms and a population of 7,176 post offices in rural area are opened subject to satisfaction of norms regarding population, income and distance stipulated by the department. There is an element of subsidy to the extent of subsidy to the extent of 85% of cosy in opening post office in hilly, desert and inaccessible areas, whereas the subsidy in opening post office in normal rural areas is to the extent of 68% of the cost. 5.Telecommunication : The opening of this sector has not only led to rapid growth but also helped a great deal towards maximization of consumer benefit. National Telecommunication policy was announced in 1999. Which allowed private participation in this sector, Due to which India's teledensity reached 84.5% by nov.2010. Gramin Sanchar Sewak Scheme launched in 2002 by PM for rural population willing to work as franchisee for BSNL. To ensure cheaper and better connectivity in rural areas BSNL has announced its partnership with Chennai- based IT solution company Novatium. Table 4 Growth of telephone connection (in million) Year Gross total 2008 300.49 2009 429.73 2010 621.28

Source: Government of India, Economic Survey 2011

5)Labour & Employment Reforms : The new economic policy has directly affected industrial relations in the country. With the view to achieving inclusive development employment generation is very essential.

1.MGNAREGA : Mahatama Gandhi National Rural Employment Guarantee Scheme,2006 is a flagship programme of the GOI touches the lives of the rural poor and promotes inclusive growth It aims at enhancing livelihood security of household in rural areas of the country by providing at least least hundered days of guaranteed wage employment. 2.SGSY : Swarnjanti Gram Swarojgar Yojana,1999 to help poor rural families cross the poverty line byy assisting them to take up income generation economic activities. 3.SJSRY : Swarnjayanti Shahri Rozjar Yojna,1997 to provides gainful employment to help urban unemployed. 4.EAS : Employment Assurance Scheme,1993 merged in Sampoorna Gramin Rojgar Yojana in 2001,to provide profitable employment. 5.Jawahar Rozgar Yojana, Prime Ministers Employment Generation programme,Training to rural youth for self employment, etc are also in place.

HYPOTHESIS Economic Reforms post 1991payment crisis has bought systemic changes in Indian Economy. These systemic changes(LPG) was a complete turn around from socialist orientated prospective to Neo-libral prospective of capitalism.

METHOD OF COLLECTION The above all information has been taken visiting various govt, websites and reading Economic survey 2011 by GOI as I mentioned above.

ANALYSIS Above all information and data shows there has been gradual progress in all sectors of economy. But all the data does not give us the actual progress in numbers. There is a lack of transparency in it at the same time absolute change or increase is missing.

CONCLUSION No doubt fruits of growth have brought prosparity in most of the sections but it has not made desiralble impact on poverty.so that we can say that there exist distinction in Bharat v/s India .They are the faces of same coin shining differently with growth and prosparity .

SUGGESTION

It is a time for India to go for 2nd generation of Economic Reforms with Inclusive growth. Make both side of coin shine equally.The scar of poverty should no longer glimish. The face of emerging economic super power will be India soon.