Top 5 Economic Reforms in India- SSC CGL& CHSL
The first major economic reform that occurred in the Indian economy was at the time of independence in 1947. The partition of India into India and Pakistan along with the independence of the country gave a new and fresh framework to the Indian economy back then. Economic reform was technically introduced in July 1991 in the service sector. Here are 5 most important Economic Reforms of India.
5 Most Important Economic Reforms in India
1. Implementation of Goods and Service tax (GST)
The implementation of Goods and Service tax is a value added tax imposed on most of the goods and services sold for domestic consumption. The Atal Bihari Vajpayee’s Government, in 2000, for the first time talked about something called GST. Since then, several proposals from the bill was passed in parliament and finally in August 3, 2019, GST Bill was passed by all the houses of parliament. It came into implementation on July 1, 2017 under the Modi led BJP Government. This taxation system aimed to eliminate excessive taxation.
2. Demonetisation of currency notes of Rs 500 and Rs 1000
Demonetisation was one of the most surprising moves in the Indian Economy. On the evening of November 8, 2016, during the Diwali Celebrations, Modi government imposed a ban on the use of currency notes of Rs 500 and Rs 1000. The notes of 500 and 1000 were to be exchanged through banks with a certain limit each day. This move was meant to bring out the Black Money, figure out the fake currency and remove the funding to terrorism. In replacement of the Rs 500 and Rs 1000 notes, new notes of Rs 500 and Rs 2000 were introduced.
3. Economic Reform of 1991
The Economic reform of 1991 under Narasimha Rao’s Government, occurred because inefficient management of the economy of India in the 1980s. The revenue generation of government were not able to meet the increasing expenses. Hence, the Indian Economy came in debt. The government was unable to pay the money borrowed from foreign sources. India, in order to clear out these debts, went to world and international monetary fund for loan and got a funding of $7 million to clear out the debts. In return, India was asked to remove trade restrictions.
In return, three economic reforms were made
Liberalisation – This states that any restriction which is hindering the development will be put to end. It opened doors for foreign investment.
Privatisation – This includes giving control of different departments in public sector to private bodies.
Globalization – This suggests the integration of Indian economy with the world economy.
4. Nationalisation of Banks
This was a move implemented by Indra Gandhi’s Government in 1969 and was a major move after independence. According to this reform, 14 major commercial banks were converted into National banks.
5. Black Money Bill
The Black Money bill was passed by the Lok Sabha on 11 May 2015. It dealt with the black money stashed abroad and laid harsh punishment which could extend to imprisonment up to 10 years. Also, anyone found with undeclared foreign income will have to give 30% tax and may face criminal prosecution along with 70% as penalty.
These were the biggest economic reforms in India till now which have impacted the economic ecosystem of the country. How successful each reform has been is still a matter of debate because no reform has come up to be absolute so far.
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