The deregulation of the Indian economy, which started in the 1980s, received an impetus in 1991. While the balance of payments crisis may have provided the immediate trigger, there were structural and deeper long-term reasons underlying a paradigm shift of the economy in 1991. Thus the period 1992-2004 marks a decisive break with the past trend of macroeconomic growth. Most development indicators are favourable with foreign exchange reserves rising above US$ 130 billion, some segments of manufacturing acquiring international competitiveness, growth of Indian financial system, likely acceleration in IT sector and enhanced trade and investment cooperation between India and ASEAN and East Asian countries. The services sector is expected to gain further momentum from the commodity producing sectors, particularly in the trade, transport and communication segments and in "new economy" activities. But there is a compelling need to make the economy more competitive, open and efficient through appropriate macroeconomic policies and financial standards.
