Economic Reforms in India and Challenges in the 21st Century Srivastava Manish* Associate Professor, Department of Economics, Vidyant Hindu PG College, Lucknow, Uttar Pradesh, India *Email id: manishhindvi@gmail.com
Online Published on 06 December, 2023. Abstract Before the 1991 economic liberalization, India primarily functioned under a closed economy, characterized by state control over major industries, high tariffs, and licenses required for setting up and running businesses (Mohan, 2008). This system, often called the “License Raj,” slowed down industrial growth, with the government acting as both the regulator and participant in the market. Furthermore, limited foreign investments, restricted imports, and a lack of competitive exposure led to inefficiencies in the market (Srinivasan, 1998). The need for reforms in the 1990s was driven by a concatenation of factors: a balance of payments crisis, dwindling foreign reserves, and an inability to service its international debts (Ahluwalia, 2002). Global pressures and internal political shifts further accelerated these changes. But what is more intriguing is that the transformations initiated in the 1990s were not just ephemeral solutions to a financial crisis. They were indicative of a broader shift in India’s economic ideologies - moving from socialism to a market-oriented system. The 21st century heralded an era of digitization, globalization, and increased international collaboration. For India, a country that had just opened its doors to the global market, this century presented both unprecedented opportunities and formidable challenges. While on one hand, the IT boom of the early 2000s, facilitated by economic reforms, placed India on the global map as a major IT hub (Arora and Athreye, 2002), the nation also grappled with the pressures of rapid urbanization, infrastructural demands, and environmental concerns. Top Keywords Periodic labour force survey, Unemployment, Way-out. Top |