Descriptive ESI Question (RBI Grade B 2023) – What were the structural Reform measures taken in 1991 to end BoP crisis in India?
Sure, here’s an outline for writing an answer to the given question on the structural reform measures taken in 1991 to end the Balance of Payments (BoP) crisis in India:
Briefly discuss the BoP crisis of 1991 in India and its impact on the country’s economy
II. Structural reform measures taken in 1991
Discuss the different measures taken by the government to address the BoP crisis:
a. Devaluation of the rupee
b. Liberalization of trade policies
c. Abolition of industrial licensing
d. Reduction in import tariffs
e. Introduction of the New Industrial Policy
f. Removal of restrictions on foreign investment
g. Reduction in government control over the economy
h. Introduction of the Disinvestment Policy
i. Creation of the Securities and Exchange Board of India (SEBI)
III. Impact of the structural reforms
Discuss the positive impact of the reforms on the Indian economy:
a. Increase in foreign investment
b. Increase in industrial growth and productivity
c. Increase in exports and reduction in imports
d. Improvement in the balance of payments situation
e. Increase in foreign exchange reserves
f. Reduction in inflation and interest rates
g. Increase in competition and efficiency in the economy
h. Increase in consumer choice and standard of living
IV. Challenges and criticisms
Discuss the challenges and criticisms faced by the government in implementing the reforms:
a. Resistance from domestic industries and interest groups
b. Unequal distribution of the benefits of the reforms
c. Social costs of the reforms, such as job losses and income inequality
d. Criticism from some quarters for being too market-oriented and neglecting social welfare
Summarize the key points of the answer and discuss the overall impact of the structural reforms on the Indian economy and its future prospects.
- Provide relevant statistics and examples to support your arguments.
- Make sure to discuss both the positive and negative aspects of the reforms.
- Use subheadings and paragraphs to organize your answer and make it easier to read.
- Use formal language and adhere to the word limit.