Post Liberalization India
India's economy has come a long way since the liberalization of the market in 1991. Post 1991, economic policies in the country saw several deregulation measures, which allowed the entry of foreign capital, greater privatization, entering of more private players, lower tax rates, etc. Before this, the Indian economy was going through a tough time. In 1985, India suffered a Balance of Payment crisis, which caused India to borrow huge amounts from external financial sources, causing the inflation to rise.
The change occurred in 1991, when the then Finance Minister, Dr. Manmohan Singh, presented a historic budget on July 24, 1991. Since the change in policy in 1991, the growth trajectory has been on the upward direction. The average earning of an Indian citizen has risen almost 15-fold from Rs. 6,295 in 1991 to Rs. 93,293 in 2016. The average income still shows a rise of 5%, even after adjusting it for inflation, says an article in The Hindustan Times1. The number of jobs available has also gone up considerably across various fields, from medicine, to engineering and even various government and private industries, with the entry of more and more foreign players in the market.
India's Current FDI Scenario
The next major change in the FDI scenario of India occurred after the advent of the “Make in India” initiative, which was in a way intended to increase the FDI inflow in India. Foreign Direct Investment is an important source of debt free financial assets for the economic growth of our country. Statistics released by India Brand Equity Foundation (IBEF)2 reveal that India received US$40 billion in foreign investments in the Financial Year 2015-2016. This indicates a positive result in the government’s efforts at job creation in 25 economic sectors of India.
The policies directed towards this goal were launched in September 2014, under the “Make in India” initiative, following which the country saw a 40% rise in FDI inflow from October 2015 to June 2015, as compared to the same period the previous year. As part of this program, the government also allowed 49% FDI in the defense sector in 2014, as opposed to 47% in the preceding 3 years. Due to the success of the ongoing policies, India is expecting a 45% rise in FDI in 2016, despite the global slowdown.
In the first half of 2015, the country saw total foreign inflow of $31 billion, leading to India overtaking China and the US to gain the top spot among countries attracting the largest FDI. India also moved 16 places up to the rank of #55 among the world's most competitive economies. According to statistics, Singapore (25%), Mauritius (20%) and the Netherlands (5%) are the major contributors to the FDI inflow in India.
Financial Growth on a Personal Level
The change in policies and inflow of cash in our economy has now diverted our country’s growth path towards a much beneficial one. In this era of rising economic liberalization, it is important to choose the right investment option like a life insurance policy can go a long way in personal growth and in building a secure future as well, say investment experts. Just like the country is rested on the right investments and policies to make sure that all the dependents have a bright and safe future, it is the duty of every individual to foresee that the future of his family is safe during tough times. Considering the tax benefits and affordable premium rates a life insurance policy offers, it seems like the perfect route to achieve the same freedom and growth that liberalization has given to our country.