Explain the requirement of economic reforms …

Economic reforms 1991

The year 1991 has a special significance in the Indian economy. Many economic measures were introduced to achieve the objectives of new economic policies of the government. The economic reforms aimed at rapid industrialization. For this, the abolition of industrial licensing, allowing foreign investment, encouragement to the private sector and coexistence of public sector and private sector were taken by the government.

The main aspects of economic reforms are as follows 

(1) Liberalisation - Liberalisation means movement towards a free market system. Liberalisation otherwise known as withdrawal of regulation and

restrictions for private sectors.Private sectors are encouraged to enter into core industries which are reserved for the public sector

(2) Privatisation  - Privatisation generally means transforming all economic activities from public sector to private sector. It also refers to the setting up of private units in public utility services.

(3) Globalisation -Globalisation refers to where a country draws raw materials from any source of the world and manufacture goods and services. The finished goods also find a place in the global market. Thus globalisation is the linkage of nation's markets with global markets.