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Twenty Years of India's Liberalisation

Experiences and Lessons

image of Twenty Years of India's Liberalisation
India’s growth miracle has attracted worldwide attention, particularly because this growth has been pursuant to the wide ranging economic reforms introduced in the early 1990s. Many other developing countries intensified liberalisation during this period but were unable to experience a similar spurt in their economic growth. One distinctive feature of Indian liberalisation experience is the gradual and calibrated manner in which reforms were introduced, especially with respect to external liberalisation, be it in the financial, agricultural or manufacturing sector. This book brings together distinguished economists of India, who analyse the role played by trade and foreign direct investment (FDI) polices in growth and development of different sectors in India.

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Agricultural trade liberalization policies in India: Balancing producer and consumer interests

India followed an inward-looking and highly protectionist trade policy in agriculture till early 1990s. Barring a few traditional commercial commodities, agricultural trade was subjected to measures like quantitative restrictions, canalization, licenses, quotas and high tariff rates. These measures strictly regulated imports and exports to safeguard domestic producers’ and consumers’ interests. In most commodities levels of export and import were determined by fluctuations in domestic supply and exports were residuals. Similarly, imports were allowed with fall in domestic production to fill the gap between domestic demand and supply. The production pattern was strictly guided by domestic requirement and self sufficiency in almost all major commodities. Allocation of resources based on comparative advantage in trade did not get much emphasis. This scenario started changing with economic reforms of 1991. External trade was further liberalised with the implementation of WTO Agreement on Agriculture in 1995. The process was accelerated after India lost the dispute in WTO to retain Quantitative Restrictions (QRs) on ground of Balance of Payment

English

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