Impact of the Economic Reforms

• GDP grew at about 5.6% per annum during 1980–2000, compared to 3.5% in the previous decades.
• Rising national income suggests production of goods and services increased after reforms.

• Service sector experienced significant growth; agriculture and industry did not grow as expected.
• Major concern: employment opportunities did not increase proportionately with GDP growth.

• India's share in world exports increased from 0.1% to about 0.5%.
• Foreign Direct Investment (FDI) inflows increased from US $100 million (1990–91) to US $4,029 million (2000–01).
• Foreign Exchange Reserves increased from US $6 billion (1990–91) to US $54.1 billion (2002–03).

Agriculture

• Investment in agriculture - including public investment in infrastructure like irrigation, power, roads, and market linkages - has been declining.
• Subsidy removal led to increased cost of production for farmers.
• Export-orientation shifted focus to cash crops, threatening food security.
• Import duties on agricultural goods were reduced, exposing farmers to international competition.

Industry

• Cheaper imports led to decline of domestic industries and deindustrialisation in some sectors.
• Small-scale industries faced severe competition, leading to the closure of many units (e.g., the Siricilla Tragedy in Andhra Pradesh, where handloom weavers lost livelihoods).

Disinvestment

• PSUs (Public Sector Undertakings) were sold at undervalued prices.
• Revenue from disinvestment was not used for social development or development of PSUs.

Fiscal Policy

• Reforms reduced import duties, resulting in fall in tax revenues and less government spending on social sectors.

Globalisation & Inequality

• Benefits of higher growth did not reach the majority; rich became richer, poor became poorer.
• Even if poverty ratio fell, the absolute number of poor remained high.

• GDP growth rate improved to 5.6% per annum post-reforms but employment growth lagged behind.
• Service sector grew significantly; agriculture and industry underperformed.
• FDI inflows rose sharply from $100 million (1990–91) to $4,029 million (2000–01).
• Forex reserves jumped from $6 billion to $54.1 billion within a decade.
• Reforms hurt small industries and farmers through cheaper imports and reduced subsidies.
• PSU disinvestment was criticised for undervaluation and non-utilisation of proceeds.
• Globalisation widened income inequality, with the poor not benefiting proportionately