Indian Economy During Reforms an Assessment

POSITIVE EFFECT OF REFORMS

Increase in GDP

GDP Growth Rate increased from 5.6% during 1980-91 to 8.2% from 2007-12

Contribution of Different Sectors

Main contribution to GDP Growth has been Service Sector

Agriculture Sector suffered a decline

Industrial Sector's growth was Inconsistent

Increase in Foreign Investment

Foreign Investment is in form of

FII (Foreign Instituitional Investors)

FDI (Foreign Direct Investment)

This Foreign Investment has increased from 100 million in 1990-91 to 413 Billion in 2018-19

Increase in Exports

India has been a successful exporter in case of

Software,Textiles,Engineering Goods,Autoparts etc

Inflation

Ricing Prices have been kept in control by Govt due to various reform measures

CRITCISMS OF REFORMS

Growth and Employement

GDP Growth Rate increased after 1991

However sufficent employment oppurtunities have not been generated for the people

This is because there hasn't been much growth in industrial and agriculture sector, which generate maximum jobs

Reforms in Agriculture

Reforms made from 1991 have not benefitted agriculture sector

This is because of following reasons

Reforms in Industry

Industrial Sector also recorded a slowdown because of following reasons:

Disinvestment

It means Sale of Part of Equity of PSE to public by Government

Every year government fixes a budget for disinvestment

Effects of Disinvestment

Government Received funds from sale of PSE

In 1991, it was 2500 crore.

It increased to 1 lac crore in 2017-18

These funds should be ideally used for:

Development of Other PSE(Public Sector Enterprises)

Building Social Infrastructure in Country like Roads, Dams, Education

However, these funds are being used for

Meet shortage of Government Revenue

Also as per critics, these PSE are being sold at an amt much less than their actual value

This is causing loss to Govt

Effect of Tax Reforms and Fiscal Policies

Following Reforms were taken by Govt

NCERT Questions

Question 13

What are the major factors responsible for the high growth of the service sector?

Question 14

Agriculture sector appears to be adversely affected by the reform process.

Why?

Question 15

Why has the industrial sector performed poorly in the reform period?

Question 16

Discuss economic reforms in India in the light of social justice and welfare.

MCQ Other Books

Question 1

In the following questions, select the correct answers:

Cheaper Imported good was one of the reasons behind:

1. Growing unemployment
2. Unbalanced growth
3. Low level of Indsutrial growth
4. Spread of Consumerism

Question 2

Read the following hypothetical text and answer question that follow:

India’s Micro, Small and Medium Enterprises (MSME) sector is poised for a mega transformation in 2020, with the launch of an Alibaba-like e-marketplace, trendy yet affordable khadi

products to appeal to the masses and digital data-based credit ratings to help entrepreneurs avail loans.

However, the MSME sector is often considered the bulwark of the economy as it contributes around 29% to the GDP and 48% to the Indian exports.

There is an urgent need of major reforms and policy interventions towards ensuring timely availability of low-cost credit, improving ease of doing business and technological

upgradation, to take on the formidable challenge of creating millions of jobs, ensure equitable distribution of national income and achieving large-scale import substitution.

The World Bank has recently approved loan worth $750 million to address the immediate liquidity and credit needs of India’s MSME sector that has been severely impacted by the

Covid-19 crisis.

This will give a push to the Atmanirbhar Bharat vision of the government. (CBSE Question Bank 2021)

Question 1

Identify which of the following is not an advantage of the MSME sector?

1. It is suited for the utilization of local resources.
2. It is helpful in creation of employment opportunities.
3. It requires more capital than labour.
4. It ensures equitable distribution of income in the country.

Question 2

MSME sector suffered to a large extent in COVID-19 pandemic situation due to ________ .

1. Liquidity crunch
2. Obsolete technology
3. Government Interventions
4. All of the above

Question 3

Read the following statements - Assertion (A) and Reason (R).

Assertion (A): Small scale industries ensure a more equitable distribution of national income and wealth.

Reason (R): The ownership of small-scale industries is more wide spread than the ownership of large-scale industries.

1. Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).
2. Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).
3. Assertion (A) is true, but Reason (R) is false.
4. Assertion (A) is false, but Reason (R) is true.

Question 4

_______________ are the largest employer of the labour force in India.

1. Agricultural Sector
2. Small Scale Industries
3. Cottage Industries
4. Service Sector