Understanding Various Structural Reforms Experienced by the Indian Economy

The objective of this article is to provide an overview of various reforms put forward by the government (at that particular time), to improve the economic situation and attain stability. It is observed that the Indian economy has witnessed some changes and it begins with the key policy decisions taken by the government in the 1990s. One of the major decisions is the liberalisation policy followed post-1991 which has its positive impacts on the Indian industry and economy. The economic change process mainly addresses two aspects: macroeconomic stabilisation and structural changes. While macroeconomic stabilisation refers to maintaining the balance of payments account and its restoration (as required), structural changes are in the industrial sector, trade regime, foreign investment, foreign technology, the public sector and the financial sector. At its simplest, structural changes are improvements in the way the government works. The Economist often called ‘structural changes’ as ‘structural reforms’. According to them, such structural changes are required to stabilise bad economic situations. It depends on the kind of problems the country is facing and the situation therein on what types of changes to be carried out by the government. For instance, the Indian government has created one tax by merging several taxes related to the sales of goods. This is called Goods and Service Tax (GST) and is now followed across the country. ‘Tax regulation and simplification’ is the area in which changes have been carried out by India for a third consecutive year. Finally, the researcher would like to put forward the fact that the ‘economic change process’ has been responsible for the overall growth of the Indian Industry. The author believes that with uncertain economic (in the future) this reform process will be continuous. The demonetisation decision (taken in 2016) and the new Asset Monetisation programme that is recently launched by the government may be seen as examples of such measures. This research article therefore may be viewed as an endeavour to present an overview of the reforms taken in the past.