Liberal Economic Reforms in 1990s India: Process and Assessment

Abstract

The problem of economic development is one of the most interesting issues of both economic theory and practice. One of the most appealing cases is India, which has implemented various development strategies aimed at high economic growth since its liberation from British rule. Between 1956 and 1974 India’s GDP growth was relatively low and the economy itself was closed and highly regulated. The specific features of the Indian economy come from the conditions resulting from regulations and initiatives taken at the central, but also state and local, levels. A paradigm shift in economic policy after 1990 resulted in higher growth rates and India became one of the fastest growing economies in the world. The article describes changes in India’s economic development policy since 1990 that have gradually led to high growth rates. The study mainly uses historical analysis based on domestic and foreign literature as well as an analysis of existing data. The article concludes that reforms based on the recommendations of the Washington Consensus were accompanied by a strong role of the state, which created the foundations of the new institutional order, supervised changes and intervened when necessary. As a result, the economy entered a path of rapid growth and the efficiency of the entire market increased. Without the active and coordinated role of the state such great success would not have been possible in recent years.

Keywords

• india
• indian economy
• economic reforms
• economic transformation