25 years of reforms that changed India

When? The foreign exchange reserves were on all-time low. The country was left with hardly 2 weeks of
reserves to manage business. There was a dire need for support, but as they say, nothing comes for free.
The IMF agreed to provide the much needed foreign exchange reserves but on the condition of bringing
revolutionary level of changes in the structure of the Indian economy. It’s been more than 25 years now
and the country has seen dramatic changes happen in its economic, business and cultural domain due to
a set of reforms famously known as LPG (Liberalization, privatization and globalization).

The reforms led to opening up of the Indian economy in multiple sectors. There were bound to be a lot
of fears for an economy which had completed hardly 43 years of its independence and was getting
opened up to all the adversaries of the world, that too at an underdeveloped stage. But as they say, a
lotus emerges only in a swamp, so was the case here. The adversaries also gave way to a lot of
opportunities.

India was a relatively less developed country(being an underdeveloped country, would be better), there
was a lot to be done and improved upon. Being so far below its potential, there was a great scope to
develop at some tremendous pace. In our capitalist system, such opportunities are quickly identified and
big players jump in to the game to milk the situation. Similar things happened in India. The big MNCs
from the developed world saw a sea of opportunities of growth and returns to investment. Drained out
from the saturation of returns in their own developed backyards they turned to the emerging parts of
the world economy and an opening up of Indian market not only gave an opportunity to invest and grow
but also there was a huge consumer base in the country. Being densely populated has its cost but this
also leads to the fact that you(who?) cant be ignored easily, that too in a free market set-up.

A large pool of English-spoken and technically sound workforce made the IT sector MNCs fall on their
feet to take advantage of the cheap labor. China had cheap labor but English proficiency was lacking so
India got some advantage of its colonial legacy. Growth in business led to associated services becoming
important and these provided another avenue for growth.

Amidst all this, somewhere a few mistakes were happening. A not so very well developed manufacturing
sector stagnated. The spur in services led a diversion of attention from the very crucial agriculture and
primary goods sector. Not that the opening up didn’t help in technologically making these sector
efficient but a sound balance in development couldn’t be maintained.

But over the period of time, with experience and growing size of the Indian economy, with
upcoming(increased/enhanced) bargaining power in the world order, the country has spotted its
structural flaws and the whole hierarchy right from the top leadership is bringing in reforms to make the
economy structurally more sound and resilient to world disturbances. There is an exciting journey ahead
with the advantage of the demography on our side and a stagnating west.