In a global context, Liberalization, Privatization and Globalization (LPG policy) are no longer an option but a fact. Whether one likes it or not, it is bound to influence all spheres of life and activities. Developing countries like India may have to learn to manage the process far more skillfully and efficiently for the development of the country.
In the broad setting of reforms in many countries in the 1980s, India was an apparent anomaly. India was at the crossroads. She was facing a macroeconomic crisis that required immediate attention. The macroeconomic crisis provided the opportunity and the necessity to address meaningfully the inefficiencies in our policy framework that had altered our economic performance and to begin constructively the task of undertaking the necessary microeconomic or structural reforms that had long been overdue. The reform process began in India in 1991. The reform process has affected the indigenous communities of India, particularly their culture, languages and style of life. The indigenous people are largely the deprived section of India. They continue to become poorer due to the impact of reform measures. The paper studies the process of adverse impacts of reform measures on the indigenous communities of India with some case studies.
For nearly two decades, a “silent revolution” has been sweeping through the world – in developed countries as well as in developing countries. It is the revolution of economic reforms, in other words, a change from an economic system of central planning to a market based economy. Economic reforms have become a universal phenomenon and are viewed as indispensable for rapid and balanced development. It involves both macroeconomic stabilization and structural (microeconomic) reforms. Rangarajan rightly points out that. While the stabilization policies were intended to correct the lapses and put the house in order in the short term, the structural reform policies were intended to accelerate economic growth over the medium term. Structural reform policies cannot succeed unless a degree of stabilization has been brought about. But stabilization by itself will not be adequate unless structural reforms are undertaken to avoid the recurrence of the problems faced in the recent period. Structural reforms were broadly in the area of industrial licensing and regulation, foreign trade and investment and the financial sector. There is considerable unanimity among economists about the need to reduce and, as far as possible, eliminate barriers to the entry and expansion of firms. The policy of licensing as has been practiced in the past has had no particular merit and, in fact, the Approach document of the Eighth Plan published in May 1990 had said: “A return to the regime of direct, indiscriminate and detailed control in industry is clearly out of question. Past experience has shown that such a control system is not effective in achieving the desired objective. Also the system is widely abused and lead to corruption, delays and inefficiency”. Economic reforms, as promoted by IMF and World Bank, are expressed in two concepts: Stabilization and Structural adjustments. Related to that is a rule-based operation of free trade and trade related services, globally promoted and administered by WTO through a series of multi-lateral agreements, known through such acronyms as TRIPs (Trade Related Intellectual Property Rights), TRIMs (Trade Related Investment Measures), GATs (General Agreement on Trade in services) etc. Two IMF economists have defined stabilization measures as “a package of policies designed to eliminate disequilibrium between aggregate demand and supply in the economy, which typically manifests itself in balance of payment deficits and rising prices”. Actually, this implies restoring two types of balance viz. external balance of payments and budgetary equilibrium, both of which are assumed to be complementary. These balancing acts are needed to contain prices....
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