The 1990s was a dark course for India, surrounded by all sorts of predicaments from all sides. The then Finance Minister, Manmohan Singh, lit the torch of hope with the announcement of the 1991 economic reforms. The priority was to make India economically stable and drag it to the right path of growth. India truly took some bold steps with privatisation, liberalisation and globalisation to create a competitive economy.

The reforms helped India to emerge as one of the fastest-growing economies in the world. It has been 30 years since the historic reforms, and the question now is: How far have we been successful in building on the 1991 economic reforms?

Looking the achievements of the last 30 years, India does seem on its way to lead the world, According to Reserve Bank of India’s estimates, India's real GDP growth is projected at 9.5 per cent in FY22 . Talking about infrastructure, the government’s plan to monetise ₹6-lakhcrore of assets in the next four years seems promising if implemented well. In the financial year 2020, the total number of MSMEs in the country was more than 63 million, given adequate support, this sector can flourish.

India has gone ahead of the US, to rank two, in the list of most attractive manufacturing hubs. But to reach the first position, which China holds, will require greater effort and better geopolitical scenarios. The pharmaceutical industry in India is the third largest in the world in terms of volume and fourteenth in terms of value. This is one of the sectors that holds promise. The investment in India has been widely promoted through schemes like Make in India, and the scope for increased FDI, as announced in Budget 2021, indicates a better future. India also shines bright with an increasing number of unicorns every year.

The Asian region has some of the strongest competitors for India — China, Taiwan, Japan and South Korea being the major ones. Several successful and innovative companies, such as Sony, Samsung and Acer, have played a key role in the economic development of these countries. Beginning from light manufacturing and labour-intensive industries, South Korea and Taiwan have ventured into heavy industries, such as shipping. India can learn from the countries the structuring of economic policies.

Hand-picking the areas of improvement for India, technological advancement should take centrestage now. India needs to modify the Digital India mission and make it more tech oriented. There needs to be proper private-public division in various sectors. Two-thirds of the 1,000 State PSEs make losses, and this weighs on the economy. The losses of State and Central PSUs amount to one per cent of India’s GDP.

Another problem is poverty. One of the main reasons for it is unequal income distribution — the richest 10 per cent own 80.7 per cent of the wealth. Indian businesses need to boost their R&D efforts. India’s gross expenditure on R&D is 0.65 per cent of GDP, significantly lower than the 1.5-3 per cent of GDP spent by the top 10 economies.

Education is another area of development. If implemented well, the New Education Policy will open the doors to a bright future. World Bank data show that almost half of the accounts in Indian banks are inactive. The account-holders are neither saving money nor conducting transactions; this needs to be addressed. On the energy front, a shift to cleaner and cheaper energy can give the economy a big boost. The “Ease of Doing Business” ranking has slumped, and India needs to move up the rankings especially to attract FDI.

In these 30 years, India’s share in the global economy has trebled, from 1.1 per cent to 3.3 per cent.. The Budget of 2021 was deemed to be the “modern 1991 reforms”. Currently, the economy seems to be slowly shifting back to happier times post the pandemic blow. However, there is still a long way to go to make the dream of a $5 trillion economy come true.

Rajesh is a consultant and columnist, and Deshna is a student researcher

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