| India declared its independence in August15,1947. In the four decades after itsindependence, the Indian economy has always been low-speed growth state. From1950to1980, the average annual GDP growth rate was only3.5%and the average percapital income increased by only a little more than1%per year. Low economicefficiency and the economic structural imbalance has severely restricted the sustainedand healthy economic development. People’s living standards were generally poor.The economic status of India in the international arena has been declining.Faced with this situation, the Nehru administration and the Gandhi governmentcarried out the orientation of public enterprises and private enterprises. The mixedeconomic system mode did not adapt to India’s own development and the intensity ofreform was not enough. There was not true market economy. India, at the time,urgently needed a comprehensive economic reform. The foreign exchange crisis of1991was generally considered to be the fuse and direct cause of the economicreforms in India, which has triggered a sharp decline of the international credit ratingand debt-ridden. It has seriously affected the development of the Indian economy, buton another level, it has promoted the Indian government and people to determinecarrying out economic reform and adjustment.In the meantime, India was facing with external shocks. With the pressure of therise of the Four Asian tigers, China’s reform and opening up, the collapse of the SovietUnion and Western countries as well as international organizations, Rao finally cameto power in1991and the government began a radical economic reform, which openedthe prelude to the most comprehensive reform in India since independence.This paper argues that economic reforms in India can be divided into three stages,namely the early stages of the Rao government-led reform, the acceleration phase ofthe reform led by Atal Bihari Vajpayee, on behalf of a coalition government, and thedeepening of reform, development stage led by the Singh government from1991tillnow. This paper also introduces the content and features of the three stages of reform in terms of industry, public enterprises, the field of foreign investment and trade, thefinancial sector, financial sector, agriculture, software and information industry.Through three periods of economic reform, we can say that the Indian economy hasachieved growth by leaps and bounds. It has also made remarkable achievements.This paper proposes eight aspects of the reform, including significantly fastereconomic growth, the strong growth of foreign trade, the increasing foreigninvestment, balance of payments in good condition, changes in the industrial structure,sprung-up high-tech industries, personnel training elite, and domestic demand growth.But it is undeniable that there are still many problems for India’s economic reforms,such as political instability, inconsistent policy, poor government finances, ineffectivepublic enterprise reform and more serious economic imbalances. If the Indiangovernment does not propose solutions to address these issues as soon as possible,then it will inevitably restrict the future development of the Indian economy.Finally, this paper analyzes the status of economic reforms in India. It believesthat private capital will enter the field of widening more liberal foreign investmentpolicy and dominate the software industry, energy, population problems that haveconstrained economic development; while the future economic reforms in Indiaprospects that under the conditions of rich human resources, huge market potentialand broad space for development of urbanization, favorable international environment,India’s economic prospects for the future development will be even brighter. |
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