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1.0 Introduction
Today India is one of the most exciting emerging markets in the world. Skilled managerial and technical manpower that match the best available in the world and a middle class whose size exceeds the population of the USA or the European Union, provide India with a distinct cutting edge in global competition.
As one of the most important emerging markets in the world with tremendous potential for sustained high rates of economic growth, India is increasingly becoming a key player in the world economy. In response to a fiscal and balance of payments crisis in 1991, India launched a program of economic policy reforms. The program consisting of stabilization-cum-structural adjustment measures was put in place with a view to attain macroeconomic stability and higher rates of economic growth. By contrast, the reforms in the 1990s in the industrial, trade, and financial sectors, among others, were much wider and deeper. As a consequence, they have contributed more meaningfully in attaining higher rates of growth (Corden, 1975).
More than a decade of opening up of the economy has produced new dynamism, most dramatically in the information technology sector, but in others as well. The new technologies (especially information technology and biotechnology) give new opportunities for economic and social development. India should be able to implement the remaining reforms and re-orient governmental spending away from inessential expenditures towards high priority areas of health, education and infrastructure development, then it is very likely to attain and sustain even higher rates of economic growth. Besides, stronger growth should attract more foreign savings, especially foreign direct investment, and thus raise the investment rate (Ahluwalia, 2002).





2.0 India in Economic History

Multilateral lenders, foreign analysts and investors universally believe that fiscal...