| Publication |
2014.
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| Summary/Abstract |
Like other developing countries, India also faced a huge economic crisis during 90s. Basically, over the 80s there was a large and growing fiscal imbalance going on in the Indian economy and from mid 80s, India started facing problems related to balance of payments. Because of the Gulf war, India's export business decreased, oil import bill increased, credit dried up and investors were apprehensive about more investment. All these factors together led to a serious economic crisis during the end of 1990 and the government was close to default, foreign exchange reserves had been reduced and as a result, India had to airlift its gold reserves as a pledge in order to secure desperately needed international financing from international monetary fund (IMF). And, in this context, in order to secure its economy from financial crisis and to attract huge foreign direct investment (FDI), India had taken significant policy shifts in the beginning of the 90s. This new model of economic reforms is known as the neo liberal economic policy of India or LPG (liberalization, privatization and Globalization) model. The main objective of this model was to make the Indian economy as the fastest developing economy in the world which will be able to match up with the biggest economics of the world. Soon after, the government started introducing some new polices which include foreign technology agreements, foreign investment, deregulation, privatization, industrial licensing and abolition of license raj and, following the new liberal polices of India from Indian origin from different parts of the globe and overseas Indians stretched their hands with full of help to overcome this financial crisis in a number of ways. Starting from help in privatization, industrialization and foreign direct investment they have always supported their traditional homeland.
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