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.

1. Poor performance of public sector.
2. Adverse in balance of payment.
3. Huge burden of debts.
4. Fall in foreign exchange reserves.

Implicit cost also called an imputed cost, implied cost, or notional cost, refers to the cost of self-supplied factors or the factors owned and employed by the firm itself. For e.g., a salary of an entrepreneur.

An opportunity cost is the cost of an alternative that must be forgone in order to pursue a certain action. In other words, the cost of enjoying more of one good in terms of sacrificing the benefit of another good is termed as opportunity cost of the additional unit of the good.

Example: We have Rs 15,000 with two choices a) to invest in the shares of a company XYZ or b) to make a fixed deposit which gives interest 9%. If the company XYZ gives a return of 15%, we will benefit when we invest in the shares as the alternative would be less profitable. However if company’s return is only 3% when we could have made a return of 9% from FD, then our opportunity cost is (9% - 3% = 6%).

Problems of Indian Agriculture
(i) Dependence on Erratic Monsoon- Irrigation covers only about 33 percent of the cultivated area in India. The crop production in rest of the cultivated land directly depends on rainfall. Poor performance of south-west Monsoon also adversely affects the supply of canal water for irrigation.
(ii) Low productivity- The yield of the crops in the country is low in comparison to the international level. Per hectare output of most of the crops such as rice, wheat, cotton and oilseeds in India is much lower than that of U.S.A., Russia and Japan. The vast rainfed areas of the country, particularly drylands which mostly grow coarse cereals, pulses and oilseeds have very low yields.
(iii) Small Farm size and Fragmentation of Landholdings- More than 60 percent of the ownership holdings have a size smaller than one (ha). Furthermore, about 40 percent of the farmers have operational holding size smaller than 0.5 hectare (ha). In India, the land holdings are mostly fragmented.
(iv) Lack of commercialization- A large number of farmers produce crops for self-consumption. These farmers do not have enough land resources to produce more than their requirement.
(v) Vast under -Employment- There is a massive under-employment in the agricultural sector in India, particularly in the un-irrigated tracts. In these areas, there is a seasonal unemployment ranging from 4 to 8 months. Even in the cropping season work is not available throughout, as agricultural operations are not labour intensive.

The Indian economy is primarily an agriculture oriented economy. The characteristics of Indian agriculture are as follows:

1. Low productivity: The agricultural productivity of our economy is perhaps the lowest in the world. Although, it has shown a significant improvement during the last two and half decades, it continues to be as low as one fourth of that of the advanced countries. The main cause of low yield per hectare is the low fertility of the soil,  and less concern to lower it through the use of green manure, fertilisers and scientific rotation of crops.
2. Small and Uneconomic land holding: Land holdings are either small or marginal, i.e., less than two hectares. The small size of holdings is due to the law of inheritance, socio-cultural and economic factors. Moreover, these small holdings and fragmented fields are not suitable for modern methods of farming. 
3. Distribution of land: The agricultural land in India is unequally distributed. The per capita cultivable land is less than one acre.
4. More emphasis on food crops: Due to the demand for food grains, priority is given to food crops rather than commercial or cash crops. The major portion of the cropped area is occupied by grain crops in the kharif and the rabi seasons. Rice, maize, millets, bajra, ragi and pulses are the main crops grown in the kharif season whereas wheat, barley and gram are grown over three-fourth of the total cropped area in the rabi season. 

Agriculture is the most important sector of Indian economy because:

1. It accounts for about 58 per cent of employment in the country (as per 2001 census).
2. Moreover, this sector is a supplier of food, fodder for a population of over 120 crores and raw materials for agro-industries.
3. Recently, the rural sector (including agriculture) is being seen as a potential source of domestic demand, showing its relevance in growth of secondary and tertiary sectors.
4. Various studies indicate that the potential of rain fed areas has not been fully utilised. A targeted development of rain fed areas should be prioritised. India's 60-year quest for land reform remains incomplete. It helps in increasing the foreign exchange.  
5. A large proportion of India's export trade is based on agricultural products like jute, tea, coffee, spices etc. In 2013 India exporyed agricultural products worth 39 million dollars. 

Four steps which were taken by the Indian government to improve agriculture in India after independence were

1. Land reform was the main focus of the government in the First Five Years’ Plan. It aimed at consolidation of land holdings, abolition of the zamindari system etc.
2. During the 1960’s and 1970’s, many agricultural reforms were introduced in agriculture to enhance production. The Green Revolution was such a measure.
3. The government started many schemes to protect the crops against droughts, fires, floods and other calamities.
4. Various cooperative banks and societies were established to provide farmers with loans at low rates of interests.
5. The government also announced minimum support price and procurement price for the important crops to check the exploitation of farmers by middlemen. 

Agriculture is the mainstay of the Indian economy because:

1. Two thirds of the population is dependent on agriculture. It generates large scale employment.
2. It provides food for teeming millions.
3. It provides raw materials to many agro-based industries like cotton, rubber, sugar.
4. Export of agricultural products like tea and spices earns valuable foreign exchange.
5. It contributes 26% of gross domestic product (GDP).

Informalisation of Workforce

It implies a simultaneous fall in the percentage of workforce in the formal sector with a rise in the percentage of workforce of informal sector over a period of time. 

Casualisation of Workforce

It implies a rise in the percentage of casually-hired workers in the total workforce over a period of time.