Role of Economic Reform in the Growth of Indian Economy

Abstract

This article is based on the growth of Indian economy after economic reforms. Economic reforms in India were set in motion, though on a modest scale, when controls on industries were reduced by the 1985 industrial policy. The economic reforms programme got a big boost when the Government announced a new industrial policy in the Indian Parliament on July 24, 1991. Since then, it is liberalisation, privatisation and globalisation all the way and the process is underway. In the new liberalised industrial and trade environment, the Government is progressively assuming the role of a promoter, facilitator and catalytic agent instead of a regulator and controller of economic activities.The Indian economy has responded well to the economic reforms initiated since 1991. The Approach Paper on the Eleventh Five Year Plan (2007-12) released by the Government in November 2006 has indicated 7.2 per cent growth rate during the Tenth Five Year Plan (2002-07). Though this is below the target of 8 per cent, it is the highest growth rate achieved in any Plan. The growth rate for the Eleventh Plan has been fixed at 9 per cent. In short, the Indian economy is in a much stronger position than it was a few years ago. The economy, therefore, has shown that it is capable of achieving high growth rates in response to the implementation of appropriate economic reform policies.