20.4 ASSESSMENT OF ECONOMIC
REFORMS
In the First and Second Five Year Plans, the goals of economic development
were identified as under:
1) Ahigherrate of growth of GDP:
2) Enlargement of employment potential leading to full employment;
3) Removalofpoverty;
4) Promotionof equity in distributionofincome;and
'5) Removal of regional disparity between the rich and the poor states.
On the basis of these goals, economic reforms can be assessed as under:
1) Itis argued by the proponents of economic growth that the reform process
acceleratesthe economic growth. The annual average growth ratcof GDP during
the decadeof 1990s was about 6 percent against the average GDP growth rate
of 5.5 percent during the pre-reform period (between 1980-81 and 1990-91),
Presently, the economy is all set to grow at astill higher rate of 7.0 per cent
which may goon to becomeand even exceed 8.0 per cent. Thus, the reform
process o a certain extent has been successfulin obtaininghigh GDP growth
rate,
2) ‘The growthrate ofemployment declined from 2.39 per cent per annum during
1983 and 1990-91 to amere 1.0 percent per annumduring 1990-91 to 1999-
2000. The growth rate of employmentin organised sector was merely 0.6 per
cent. This was just one-third of the growth of employment witnessed in the
pre-reform period. The growth rate of unorganised Sector which was of the
order of 2.41 per cent during the pre-reform period (1983 to 1990-91), also
declined to 1.1 per cent in the post-reform period. Thus, decline in the
employment indicates the state ofjobless growth.
3) Poverty ratio declined from 36 per cent to 26.1 per cent in 1999-2000.
However, the rate of poverty reduction which was around 3.1 percent per
annum during the period 1983-1991 reversedto I percentin the 1990s, i.¢.,
between 1991 and 1997. Thus, an inverse relationship is observed between
GDP growth and poverty reduction. This reflectsthat the benefitsof growth do
not reach to the poor.
37Economic Development
4)
5)
7?)
During the pre-reform period. of the total iyS lost, 53.8 percent were
accounted for by the strikes and remaining: percent were due to the lockouts.
However, in the post-reform period. i.e., 1991-2000, the proportion of the
mandays lost due to strikes came down to 39.8 per cent and share of lockouts
increased to 60.2 per cent. Thus, in the post-reform period, proportion of
mandays lost due to lockouts was much higher in the post-reformperiod than in
the pre-reformperiod. This shows that due to privatisationand policy ofreforms,
‘the employers’ militancy has increased and the workers have been put in much
vulnerable position.
The quality of employment has also deteriorated in the post-reform period. The
share of casual labour in the total workforce which was 32 percent in 1993-94
rose to 33.2 percent in 1999-2000. All these facts indicate that labour has
been adversely affected by the economic reforms.
‘The agriculturesector has been neglected in the reform period. The growth rate
of agriculturedeclined from 3.7 percent perannum during the pre-reform period
to only 29 in the post-reform period.
Economic reforms haveaggravated regional disparities by favouring the forward
has increased from 2.7 in 1990-91 to 4.6 in 2000-01. Thus, regional disparities
in terms of growth of NSDP= both total and per capita - has widened further.