3471. India: Economic Growth and Poverty Reduction During the 1990s
- Author:
- Catherine G. Corey
- Publication Date:
- 07-2001
- Content Type:
- Working Paper
- Institution:
- United States Agency for International Development
- Abstract:
- The fiscal crisis that struck India in 1991, as the result of myriad internal and external factors, compelled the nation to adopt a series of economic reforms and liberalization policies. The genesis of the fiscal crisis lay partly in the highly protected domestic economy that maintained extensive subsidization, licensing and investment regulations, thus placing considerable burdens on the expenditures of the central government. Compounding this problem was a rapidly expanding current account deficit that had grown over time as import demand steadily increased and exports and foreign investment lagged. These conditions, in combination with external factors, generated a severe balance of payments crisis in which India came perilously close to defaulting on loans from international lenders. Under the leadership of Prime Minister Narasimha Rao and Financial Minister Manmohan Singh, the Indian government initiated a series of macroeconomic reforms. This included reductions in fiscal expenditure, privatization of state-run industries, promotion of foreign investment, and liberalization of international trade policy.
- Topic:
- Development, Economics, International Trade and Finance, and Poverty
- Political Geography:
- South Asia and Asia