state 3 arguments in favour of economic reforms in india.
The following are the arguments in favour of the economic reforms:
1. Increase in the Growth Rate of GDP-The high economic growth rates were experienced due to the economic reforms. In the pre-liberalised period, despite various growth measures of the government, the economic growth rate of India was lower than 4% per annum. However, with implementation of reforms, the economy has grown with a substantial pace.
2. Safety-Check on Fiscal Deficit- Prior to 1991, dueto higher level of non-developmental expenditure, the fiscal deficit of India was as high as 8.5% of GDP of the government. Therefore, introducing the economic reforms became inevitable. With reform process in India, the fiscal deficits have been controlled at the levels of 5% approximately.
3. Stimulating Industrial Production- Under reform process, Indian industries are now experiencing increased growth rates due to increased level of competition from foreign industries.