ABSTRACT
During the past two decades, India has moved away from its former ‘command and control’ policies to become a market-based economy. This process started in the mid-1980s and gathered substantial momentum at the beginning of the 1990s. The process of reform has continued in this decade with a further opening of the economy and the creation of regulatory institutions to oversee the march towards fully competitive markets. As a result of the liberalization, GDP per capita has been rising by 7 per cent annually, a rate that has led to its doubling in a decade. This contrasts with annual growth of GDP per capita of just 1 per cent in the three decades from 1950 to 1980. Rapid growth turned India into the third-largest economy in the world in 2006 (after the US and China and just ahead of Japan when measured at purchasing power parities), accounting for nearly 7 per cent of world GDP (OECD 2007).
