What are the important reforms introdue …

The first important reform in the external sector was made in the foreign exchange market. Exchange rate reforms have proceeded gradually beginning with a two- stage cumulative devaluation of rupee by about 20 percent effected by July 1991. The net result was an effective devaluation of the rupee by around 35 percent in nominal terms and 25 percent in real terms between July 1991 and March 1993.
In 1991, as an immediate measure to resolve the Balance of Payments (BoP) crisis, the rupee was devalued against foreign currencies.
This led to an increase in the inflow of foreign exchange. After liberalisation policy of 1991

1. Approval was given for direct foreign investment up to 51% foreign equity in high priority industries.
2. Automatic permission was given for foreign technology agreements in high priority industries up to a lump sum payment of Rs.1 crore.