Ankit Sharma
History
March 2024
Policy changes and economic effects transformed India's economy from 1980 to 1999. In the early 1980s, modest reforms to reduce state control and encourage private sector involvement set the stage for more sweeping changes in the 1990s. After a severe balance of payments crisis, deregulation, trade liberalization, and pro-business policies pushed India toward a market economy in the early 1990s. In 1980-1999, GDP grew 6% due to rapid economic expansion, technical advancement, and increasing productivity. Growth accounting exercises show that while physical capital and education were important, the rise in Total Factor Productivity (TFP) from the early 1980s onwards marked efficiency and production technology advancements. These advances were hampered by income inequality and geographical differences, highlighting India's complicated economic change throughout this crucial period. These findings demonstrate India's diverse economic evolution, driven by structural reforms and internal dynamics
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