Gujarat BoardEnglish MediumSTD 11 CommerceEconomicsEconomic Reforms2 Marks
Question
Explain the reasons which compelled India to adopt reforms in $1991.$
✓
Answer
On account of the defects of economic policies implemented due to the first four decades of planning, the development of private sector was hindered and public sector which was assigned the main duty of development of economy proved inefficient.
The development growth rate t remained very low.
Not only that to meet the inefficiency and losses incurred by public sector, fiscal deficit had to be increased.
The restrictions on foreign trade kept the import industries in low efficiency.
Reserve was more than export and India had to approach IMF to solve the problem of foreign exchange and as a part of the conditions of IMF aid, economic reforms had to be made.
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