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India ' s Growth Story from 1991 to 2016 :
What Changed : The reforms started in 1991 have brought changes and differences . End of licensing took place . Companies were freed from quantitative restrictions . Import of plant and machinery , as well as consumer goods , became easier . Foreign companies were allowed to enter JVs with domestic companies . The beginning of disinvestment of profitable public sector undertakings occurred . But the revival of sick PSUs did not gain much traction . SEBI became the sole market regulator . Indian software companies were given the concession , and this grant enabled Indian software companies to become more cost effective . Peak income tax rate came down over the years to 30 % and some slabs to three . Tax-GDP ratio has improved , but still short of the rates seen in developed nations .
How the Economy Changed : 1971 was Socialist India . 2014 is India , with flourishing market economy . India is today the world ' s 7th largest economy . India is now among the world ' s top exporting countries . Rupee found a realistic level against the dollar in a liberalized economy . The reforms changed the lives of not just India ' s 84 crore citizens then but those of another 36 crore citizens who have been born since . How much has India changed since then ? Since 1991 , India ' s GDP has quadrupled its FOREX reserves surging from $ 9,220 million to $ 355,560 million , and exports from $ 17,865 million to $ 262,031 million .
It is clear that the country registered nearly fivefold increase in the GDP , nearly fourfold in Per Capita Income , twelvefold in household savings , two hundred thirty-three fold in FDI , fortyseven fold in forex reserves , thirteen-fold in export and almost threefold in the exchange rate .
India has become a world leader in frugal engineering , a concept that did not exist a decade ago . Frugal engineering cuts costs by not just 10-15 % under Western levels but by 50- 90 %. Innovation has improved productivity so dramatically that merchandise exports are growing faster than 30 percent annually . GDP growth has doubled or tripled since 2004 in six large , poor states- Uttar Pradesh , Bihar , Orissa , Chhattisgarh , Jharkhand and Madhya Pradesh . But for this , the national GDP rate could never have risen to 8 per cent . Fast growth has trickled up from the poor states to the national level .
How We Changed : But these are just numbers . The difference in our lives and lifestyles is a lot more fascinating . Back in 1991 , owning a Maruti 800 ( `1.48 lakh in Delhi ) was a middle-class status symbol . Scooters like Bajaj Chetak and Lambretta accounted for more than half of the two-wheelers sold in the country . A bottle of soft drinks , be it desi versions like Gold Spot or Thums Up , cost just `4.50 .
Today we are one of the consumption engines of the world as we are guzzling colas , downloading music on our iPads and zipping around in our sedans . The cola market is worth about `10,000 crores , up from just `200 crores in 1991 ( Table : 1 ).
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Economic Challenger // ISSN 0975-1351 / Oct . -Dec . 2016