On Fiscal Adjustments Since The Rao Reform In India

This article studies the Indian 20-year fiscal adjustment process since the Rao reform in 1991, intending to reveal and learn something with a summary of it.Reviewed first are the economic expanding model based on large-scale fiscal deficit in the 1980s and the consequent fiscal crisis of 1991 in India, whereby to reveal the background and causes of fiscal adjustments started by the Rao government. Then, the processes and essentials of fiscal adjustments by Rao administration (1991-1998), Vajpayee administration (1998-2004) and Singh administration (1998-2004) are introduced and analyzed separately.From the study on Indian 20-years-long fiscal adjustments, the author holds the view that inflation in India is suppressed effectively while its financing ability strengthened, which work together to create a suitable fiscal and monetary environment for economic development in India. As all those are carried out under particular democratic political environment in India, the relevant policy and measures taken by Indian governments may provide a useful reference for developing countries.