Podcast
Questions and Answers
What impact did high levels of government borrowing have on private investment in India?
What impact did high levels of government borrowing have on private investment in India?
crowded out private investment
What was the industrial policy like in India before the reforms?
What was the industrial policy like in India before the reforms?
characterized by multiple controls over private investment
How was the industrial structure in India before reforms described?
How was the industrial structure in India before reforms described?
highly inefficient and needing support from protective trade policy
What consensus emerged by 1991 regarding the industrial and trade policy in India?
What consensus emerged by 1991 regarding the industrial and trade policy in India?
What have many countries achieved by switching to an integrated value-added tax covering goods and services?
What have many countries achieved by switching to an integrated value-added tax covering goods and services?
What was the potential consequence if the problem of high government borrowing crowding out private investment was not addressed?
What was the potential consequence if the problem of high government borrowing crowding out private investment was not addressed?
What industries were exempt from majority ownership restrictions in India since 1991?
What industries were exempt from majority ownership restrictions in India since 1991?
How were procedures for obtaining permission simplified for potential foreign investors in India?
How were procedures for obtaining permission simplified for potential foreign investors in India?
What role does the Foreign Investment Promotion Board play in considering investment applications in India?
What role does the Foreign Investment Promotion Board play in considering investment applications in India?
How did the 1993 reforms in India impact foreign institutional investors?
How did the 1993 reforms in India impact foreign institutional investors?
What changes have Indian companies undergone due to the economic reforms since 1991?
What changes have Indian companies undergone due to the economic reforms since 1991?
How have dynamic firms in India fared compared to older, less dynamic ones post the 1991 reforms?
How have dynamic firms in India fared compared to older, less dynamic ones post the 1991 reforms?
What year did India embark on economic reforms?
What year did India embark on economic reforms?
What crisis prompted India to initiate economic reforms?
What crisis prompted India to initiate economic reforms?
What policies did many East Asian countries adopt that influenced India's reform direction?
What policies did many East Asian countries adopt that influenced India's reform direction?
What were the key components of India's shift towards a more open economy in 1991?
What were the key components of India's shift towards a more open economy in 1991?
What was India's average growth rate from 1992–1993 to 2001–2002?
What was India's average growth rate from 1992–1993 to 2001–2002?
How does the average growth rate in the post-reform period compare to the 1980s?
How does the average growth rate in the post-reform period compare to the 1980s?
Study Notes
- India began economic reforms in 1991 following a severe balance of payments crisis, inspired by successful growth models in East Asia emphasizing export orientation and private sector encouragement.
- Post-reform period saw India achieve an average growth rate of around 6.0%, positioning it among the fastest growing developing countries in the 1990s, slightly better than the 5.7% growth rate in the 1980s.
- Reforms included simplifying procedures for foreign investments, allowing foreign institutional investors to purchase shares in Indian companies, leading to technology upgrades, efficient production scales, mergers, and acquisitions.
- Industrial and trade policy reforms were a key focus initially, moving away from highly controlled private investment areas and protective trade policies towards greater liberalization and openness.
- High government borrowing levels have crowded out private investment, potentially hindering the sustainability of the growth rate achieved post-reforms and the acceleration to higher growth rates.
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Description
Test your knowledge on the economic reforms in India since 1991 and analyze whether gradualism has worked. Delve into the policies adopted, their impact on growth, poverty reduction, and the context of the late start compared to other countries in Asia.
