An Empirical Analysis of Balance of Payments of India with reference to Economic Reforms

Abstract

INDIA HAS BEEN following liberalized and open Economic Policies since the advent of comprehensive economic reforms and structural adjustment programme in 1991. The year 1991 is a land mark year in the post-independence economic history of India. It was during this year that the country went through a severe economic crisis, triggered by a serious balance of payments situation. The crisis was converted into an opportunity to introduce some fundamental changes in the content and approach to economic policy. The stabilization policies were aimed at correcting the weaknesses that had developed on the fiscal and the balance of payments fronts. The structural reforms sought to remove the rigidities that had entered into the various segments of the Indian economy. The structural reforms introduced in the early nineties broadly covered the areas of fiscal policy, industrial licensing, foreign trade, foreign investment, exchange rate management and the financial sector. Since then it has been extended to other areas.