Reforms in India after 1991 have generated rapid rates of growth but Essay

Reforms in India after 1991 have generated rapid rates of growth but risk leading to increasing leves of inequality - Essay Example At the same time, the country increased its reliance on the market and restructured the role of government to achieve economic stability (Dreze & Amartya, 1995). India witnessed a change for the better in her economic performance after implementation of policy reforms in 1991. An average growth rate of 0.6 percent was experienced in the decade of 1992-93 to 2001-02, putting the country among the fastest growing, developing nations in the 1990’s. Though, this growth figure was only slightly higher than the average of 5.7 percent in the 1980’s, but it was more stable. Growth in the 80’s was characterized by a built up of external debt which eventually resulted in the crisis of 1991. In comparison, growth in the 1990’s was accompanied by notable external stability; in spite of the economic crisis is East Asia (Dreze & Amartya, 1995). The continued economic growth in India of over 7 percent per annum, despite high international oil prices and consecutive coalition governments, both at the provincial and federal level, has built confidence in the previous attitude towards the reforms. With the exception of a few issues regarding privatization of public enterprises, the reforms are generally appreciated across different political parties of the country. There are however strong apprehensions over the possible influence of the apparent reforms-driven economic growth on the prevalence of poverty (Datt & Ravallion, 1997). There have been arguments that the economic growth observed immediately after the 1991-92 reforms had not played a part in reducing poverty. According to the arguments presented by Datt and Ravallion (1997), while a sharp increase in poverty was witness as the result of the 1991 crisis, the reforms caused poverty to fall back to the pre-1991 levels, thus contradicting the assumption that the reforms brought an organized change in the country’s poverty plane. This argument