Some of the key features of the 1991 budget union were The Indian budget of 1991, presented by then-Finance Minister Dr. Manmohan Singh,
was a significant departure from the previous budgets. The budget was presented against the backdrop of a severe balance of payments crisis and an economic slowdown. The key objective of the budget was to revive the economy by introducing structural reforms and opening up the Indian economy to the world.
Abolition of the License Raj:
The budget signaled the end of the License Raj, a system of government permits that restricted the entry of new firms into the market. The budget abolished licensing requirements for most industries, allowing private enterprise to flourish.
Reduction in Import Tariffs:
The budget reduced import tariffs and made them more uniform, which led to a reduction in the cost of imported goods. This move was aimed at promoting competition and making Indian industries more competitive.
Liberalization of Foreign Investment:
The budget allowed foreign investment in many sectors of the Indian economy, including infrastructure, services, and manufacturing. This led to an influx of foreign investment into India, which helped to boost the economy.
Reduction in Subsidies:
The budget reduced subsidies on many goods and services, including food, fuel, and fertilizers. This move was aimed at reducing the fiscal deficit and promoting efficiency in the economy.
Reforms in the Financial Sector:
The budget introduced several reforms in the financial sector, including the establishment of the Securities and Exchange Board of India (SEBI) to regulate the capital markets and the introduction of the National Stock Exchange (NSE). The 1991 budget was a turning point for the Indian economy, as it marked the beginning of economic liberalization and opened up the Indian market to the world. The reforms introduced in the budget led to a significant increase in foreign investment, a rise in economic growth, and a reduction in poverty. The budget was widely hailed as a landmark in India's economic history and established Dr. Manmohan Singh as a visionary economic reformer.