Explain Economic Reforms of 1991.

Three major reforms were undertaken to agitate economic growth. They were as following:

a. Liberalization

It is removal of unnecessary restriction, regulations and policies, to encourage private sector into core industries with public sector, it is a movement towards free market economy.

b. Globalization

It refers to linkage of markets of various nations to undertake economic activities. It means that the goods and services produced in an economy can be purchased or sold in any other economy. It is movement of different economy towards each other to increase trade and commerce activities.

c. Privatization

It refers to setting up private sector in public sector utilities (telecommunication). It refers to transforming economic activities from public sector to private sector.

These reforms were aimed at rapid industrialization. It also encouraged foreign investment, opening doors for MNCs. It also led to development of small scale and cottage industries (through Concessions). Steps were taken to encourage private sector and co-existence amongst public and private sector.