Economic liberalisation in India

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The economic liberalisation in India refers to the series of policy changes aimed at opening up the country's economy to the world, with the objective of making it more market-oriented and consumption-driven. The goal was to expand the role of private and foreign investment, which was seen as a means of achieving economic growth and development.^[1][2] Although some attempts at liberalisation were made in 1966 and the early 1980s, a more thorough liberalisation was initiated in 1991.

The liberalisation process was prompted by a balance of payments crisis that had led to a severe recession, dissolution of the Soviet Union leaving the United States as the sole superpower as well as the need to fulfill structural adjustment programs required to receive loans from international financial institutions such as the IMF and World Bank. The crisis in 1991 served as a catalyst for the government to initiate a more comprehensive economic reform agenda, including Liberalisation, Privatisation and Globalisation referred to as LPG reforms.

The reform process had significant effects on the Indian economy, leading to an increase in foreign investment and a shift towards a more services-oriented economy. The impact of India's economic liberalisation policies on various sectors and social groups has been a topic of ongoing debate. While the policies have been credited with attracting foreign investment, some have expressed concerns about their potential negative consequences. One area of concern has been the environmental impact of the liberalisation policies, as industries have expanded and regulations have been relaxed to attract investment. Additionally, some critics argue that the policies have contributed to widening income inequality and social disparities, as the benefits of economic growth have not been equally distributed across the population.