Gujarat BoardEnglish MediumSTD 11 CommerceEconomicsEconomic Reforms2 Marks
Question
Favorable Effects of Economic Reforms
✓
Answer
Economic changes like liberalization, privatization and globalization were implemented by the government in $1991$ in India.
Following favorable effects are seen.
Benefit to customer : Customer started getting variety of goods of international quality at reasonable price easily.
Foreign exchange: India's foreign exchange reserve was at bottom level which is increased after economic reforms.
Increase in export: Due to liberalization, globalization and privatization policy, the export of India are increased.
Agriculture Sector: Progressive exchange rate policy has provided reasonable prices to the farmers for their farm product. Therefore total agricultural exports has increased.
Industrial Development: Along with increase in $FDI$, the risk of certain investments and debt burden of the state for importing costly technology etc. are reduced.
Large scale investments increased in the private sector which in turn increased production and employment.
Mobility in factors of production : Factors of production became more mobile within the country and between the countries.
Efficiency increase: Under an era of too many regulations, corruption, bureaucratic hurdles, delays in decision making and inflexibility in administration had become a common feature in policy implementation.
All these are found to have gradually reduced after reforms.
Neglected sector got momentum : Certain sectors which are significant in growth but neglected owing to scarcity of capital and government regulations got the momentum with private sector's investment initiatives. E.g. natural gas pipelines, modernization of railways and so on.
Shortages of goods and services became past thing, rather variety increased.
Social and cultural ties with other countries are increased.
Others : Because of more mobility in factors of production, social and cultural ties with other nations improved and scarcity of goods and services are decreased.
After implementation of economic reforms, poverty has decreased.
Need a full question paper?
Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.