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Beside other things it has high levels of poverty, illiteracy, unskilled labour, low capital equipment, macro and micro instability, lack of infrastructure, red tape and transparency and ineffective court system. Last but not the least, its decision making is done by unstable governments and motivated by political considerations. The Indian government was prompted to introduce important reforms in early 1990s as a result of serious balance of payment crisis. These reforms opened the economy to international trade and investments, abolished industrial licensing, floated the exchange rate and increased domestic and foreign private participation in financial markets...
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