ABSTRACT
THE ECONOMIC REFORMS THAT WERE INITIATED IN INDIA in 1991 had two major objectives. The immediate goal was to resolve the balance of payments crisis that had emerged in the wake of the spurt in oil prices following the Gulf War. Soaring inflation was also a major manifestation of the crisis. The policy response to this crisis comprised the conventional aggregate demand management approach. Government spending was squeezed and the growth in money supply restricted. If that had been the only goal, the 1991 crisis perhaps would have looked no different than the others that the Indian economy has weathered.
