The Economic Reforms in India Since 1991

1069 WordsJul 10, 20185 Pages
It has been over twenty years since the unlikely combination of P.V. Narasimha Rao as Prime Minister and his Oxford-educated finance minister finally liberated (so they claim) the Indian economy from overwhelming government control. It was a rotting edifice based on institutionalized scarcity, wildly illogical price controls, hilariously shoddy products, protectionism and endemic underperformance was swiftly demolished in 100 days of inspired action. The Socialist Utopia powered by the fevered imaginations of Nehru and Mahalanobis which seemed forever doomed to rot at the so called ‘Hindu Rate of Growth’ was now dead and buried, just like them. In the iconic Union Budget of 1991, Singh tabled the New Economic Policy or NEP, which…show more content…
But one can argue that ‘modern’ India has always dispossessed and ignored its poorest of the poor who are routinely bullied by the state. Now the dominant discourse has framed the so-called ‘Great Development Challenge’ as an effort to extend the ‘dynamism of liberalism’ to ‘those denied access and equal opportunity’ (Tripathi 2011). This does not make accounts of horrendous poverty any less legitimate, not does it make the suicides of farmers any less tragic. But some argue that the statistics speak for themselves. In 1991, 35.8% of India’s population of 846 million, that is, about 300 million people, lived on less than one dollar a day, which is the generally accepted measure that economists use worldwide to define absolute poverty (in a strictly global context, as opposed to relative poverty, which is necessary an intra-state indicator) . Ten years later, the figure dropped to 27.5%. By 2006, with India’s population at 1.02 billion people, that necessarily implied that there were 270 million people living in absolute poverty. In the intervening years, when India added 115 million people, those living in absolute poverty fell by 30 million. Had the poverty rate remained as it was, that is 35.8% , there have been 365 million poor people. Thus we are able to argue, with some fairly reasonable certainty that the economy, within this timeframe lifted 95 million people out of absolute poverty. I now move to the last
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