Comprehension Passage
The Indian economy has witnessed profound changes over the decades, particularly evident in the shifts in economic policies. The early phases of post-independence India were marked by a strong emphasis on a mixed economy model with significant governmental control, encapsulated in policies favoring import substitution and self-reliance. This approach aimed to build a robust industrial base and reduce dependency on foreign goods, as illustrated by the Industrial Policy Resolution of 1956.
However, by the late 1980s, the weaknesses of this system became starkly evident. The inefficiencies and fiscal imbalances led to an economic crisis in 1991, marked by a severe balance of payments problem. This crisis was a turning point, necessitating a radical shift in policy. The economic reforms initiated by Prime Minister P.V. Narasimha Rao, and spearheaded by Finance Minister Dr. Manmohan Singh, were aimed at liberalizing the economy. Key elements of these reforms included deregulation of industries, reduction of trade barriers, encouragement of foreign direct investment (FDI), and privatization of public sector enterprises.
This reform era marked a shift towards a more market-oriented economy, which spurred significant economic growth in the following decades. In recent years, policies have continued to evolve, focusing on creating a conducive business environment, fostering innovation, and ensuring sustainable development. For instance, the Goods and Services Tax (GST), rolled out in 2017, simplified the tax structure by replacing multiple indirect taxes with a single tax, aiming to create a unified national market.
Similarly, the Insolvency and Bankruptcy Code (IBC) of 2016 has been instrumental in addressing the issues related to corporate insolvency and bad loans in the banking sector. The government's push towards digitalization, epitomized by the Digital India initiative, has aimed at transforming the country into a digitally empowered society. This has also complemented other initiatives like the Pradhan Mantri Jan Dhan Yojana (PMJDY), which focuses on financial inclusion by bringing millions into the formal banking system. Nevertheless, India’s economic journey is not without challenges. Issues such as high unemployment rates, agricultural distress, socio-economic disparities, and the impacts of the COVID-19 pandemic pose significant hurdles. Addressing these will require thoughtful policy-making focused on inclusive and sustainable growth, ensuring that the benefits of economic progress reach all sections of society.
In which year was the Digital India initiative launched?
1
2014
2
2015
3
2016
4
2017