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Economic Reforms — Economics STD 11 Commerce — Question

Gujarat BoardEnglish MediumSTD 11 CommerceEconomicsEconomic Reforms3 Marks
Question
State the adverse effects of economic reforms.
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Answer

  • Unfavorable Effects of Economic Reforms :
  • Following adverse effects of economic reforms ,Ire seen :
  • Small and Cottage industries :
  • Small and cottage industries could not sustain in competition of multinational companies.
  • Public services :
  • In new economic policy, due to privatization of public services, subsidies were reduced in many sectors so, these services become expensive.
  • Dumping of goods :
  • MNC companies dumping goods at very cheap rate and so Indian companies are facing trouble to make product at that price.
  • Exchange rate fluctuation :
  • Exchange rate determination was left to the market and market fluctuated more.
  • Many companies suffered owing to such fluctuations.
  • Agriculture sector :
  • Many policies of World Trade Organization imposed strict quality measures and it is very much difficult for export countries like India.
  • Especially for exports of agricultural goods.
  • Scarcity of basic facilities :
  • To cope with the speed of privatization and globalization, the infrastructural facilities like electricity, roads etc. proved insufficient.
  • Inequalities in income :
  • The benefits of economic reforms have not reached the ordinary masses.
  • Prosperity of income in country has increased and inequalities of economic power also increased.
  • Effect on employment :
  • To increase competitiveness, modern technology has been used in industries and as a result in proportion to investment, creation of job opportunities has been less than required.
  • This has made the problem of unemployment quite serious.
  • Problem of social- culture legacy :
  • Some person believe that the social and cultural foundations of India are threatened because of globalization.
  • Consumerism increased :
  • To capture markets, advertisement are bombarded heavily on consumers which has given birth to consumerism.
  • It has affected the desire and capacity of the ordinary persons adversely.
  • Others :
  • Less foreign capital has been availed that is required for development.
  • The production and sale of life style goods increased against necessities.

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