The Effect of Indian Reforms Essay Example | Topics and Well Written Essays - 5000 words

The Effect of Indian Reforms - Essay Example The Global impact of this change can be assessed from the fact that the Indian economy is now attracting FDI at an increasing speed and it is offering support to world economies through its purchasing power parity and huge market. The reforms have however not yet benefited the entire population and in the interim, the poor-rich inequalities have increased and need to be attended to with speed. Also, the neglected agricultural sector needs to be reformed as well to give a balance to the reform process and the economy at large. It has been concluded that the economy has certainly improved since the reforms were initiated. The days of imperialism and colonialism are pat and in this new age of globalization, the world has veered to the view that all economies are interdependent and that failure of one would have deep repercussion over the rest. This has brought about a spate of reforms that are suggested or forced upon ailing economies, in the overall interest of the world economy. Theoretically, the choice has been, initiated and led by International Financial Institutions, of a big bang and shock therapy. But this formula is applicable in authoritarian regimes that force them on their economies and countries. The other approach, one that has not been largely favored, is gradual and incremental. This has always been looked upon as slow, unwieldy and risky inasmuch that its decisions can be reversed quickly towards status quo on the first signs of failure or strain. India, however, chose the latter method and spread its reforms and the liberalization and globalization process to stretch over almost two decades. In the sixties, it was unimaginable that from a net importer of food, India could become an occasional exporter about forty years later. Similarly, a receiver of foreign aid became a donor, even if a small one. And, foreign exchange, once the great constraint, would eventually become plentiful.