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2. Structural Reform Measures
It includes all the policy reforms which have been initiated by the government to boost the aggregate supply of goods and services in the economy. It naturally entails unshackling the economy so that it may search for its own potential of enhanced productivity. For the purchasing capacity of the people to be increased, the economy needs increased income, which comes from increased levels of activities. Income so increased is later distributed among the people whose purchasing power has to be increased— this will take place by properly initiating a suitable set of macroeconomic policies. For the income to get distributed among the target population, it takes time, but the efforts a government initiates to increase the supply, i.e., increasing production becomes visible soon. As production is done by the producers (i.e., the capitalists), prima facie the structural reform measures look ‘pro-rich’ and ‘pro-industrialist’ or ‘pro-capitalist’, known with different names. Ignorant people easily get swayed by the logic that everything which is ‘pro-rich’ has to be necessarily ‘anti-poor’. But it was not the case with the process of economic reforms. Unless the economy is able to achieve higher growth (i.e., income) wherefrom the purchasing power of the masses will be enhanced? And increased income takes time to reach everybody. If the economy lacks political stability, this process takes even more time due to short-term goals set by the unstable and frequently changing governments— the exact case is with India.
The process of reforms in India has to be completed via three other processes namely, liberalisation, privatisation and globalisation, known popularly by their short-form, the LPG. These three processes specify the characteristics of
the reform process India initiated. Precisely seen, liberalisation shows the direction of reform, privatisation shows the path of reform and globalisation shows the ultimate goal of the reform. However, it would be useful to see the real meanings of these terms and the exact sense in which they are being used worldwide and particularly in India.