time of Independence in 1947, India was a typically backward economy. Owing to
poor technological and scientific capabilities, industrialization was limited
and lop-sided. Agricultural sector exhibited features of feudal and semi-feudal
institutions, resulting into low productivity. Means of transport and
communications were underdeveloped. Educational and health facilities were
grossly inadequate and social security measures were virtually non-existent. In
brief, the country suffered from the twin problems of rampant poverty and
widespread unemployment, both resulting in low standard of living.
1991 is an important landmark in the economic history of post-independent
India. The country went through a severe economic crisis in the form of serious
Balance of Payments problem. Indian economy responded to the crisis by introducing
a set of policies known as Structural Reforms. These policies were aimed at
correcting the weaknesses and rigidities in the various sectors of the economy
such as Industry, Trade, Fiscal and Agriculture.