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Hot GD Topic 2021: Crises and Emergencies – Triggers for big reforms?
Recent Covid 19 Crisis has led to a lot of despair across the world. Millions have lost their family members and a lot more are facing economic challenges due to loss of business and the economic recession. Indeed, Humanity has never seen such global devastation since World War II.
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But, is there a bright side to the crisis? Is there a silver lining in the dark clouds? Some humanists and analysts certainly seem to think so.
In the midst of every crisis, lies great opportunity - Albert Einstein
MBAUniverse.com reviewed past crisis and emergencies to understand if these are triggers for big reforms. Crises and Emergencies – Trigger to big reforms? is a hot GD WAT PI Topic for MBA Admissions and other entrance exam process. So, read on for this exclusive GD Topic by MBAUniverse.com. We look at key crisis that led to reforms across the globe and in India.
Global Crisis and Emergencies that lead to big Reforms
You will be surprised to read the list of Global Crisis and Emergencies that lead to big Reforms in France, US and Europe in the last 300 years. Check list below. For instance, the French Revolution in 1789-99 lead to the end of monarchy in France which lead to the Renaissance period that led to boom of art and commerce in France. Similarly, in the US, the Civil Wars in the US lead to end of Slavery. Another great example is of Japan which was crushed in World War II but it rose from the ashes and moved rapidly towards industrialization in 1950s.
Table 1: Global Crisis and Emergencies that lead to big reforms
| Period | Crises / Emergency | Reforms |
| 1789-99 | French revolution | End of monarchy in France |
| 1861-65 | Civil war in the US | End of slavery in US |
| 1929-33 | Great Depression | 3R - Relief, Recovery & Reform Program |
| 1939-45 | World War II | Creation of peace keeping institutions like United Nations |
| 1945 | Destruction in Japan during World War II | Rapid move towards Industrialization |
| 1997 | Asian Crisis | Macro prudential and other regulatory policies |
| 2008 | Global Financial crisis | Dodd Frank Act, Regular stress testing of Banks (CCAR & DFAST) |
India has been no different…
Crisis has led to big reforms in India too. Biggest example is the sweeping Liberalization and Privatization of 1991 that we a result of balance of payment crisis! In 1991, India met with an economic crisis relating to its external debt — the government was not able to make repayments on its borrowings from abroad; foreign exchange reserves, which we generally maintain to import petrol and other important items, dropped to levels that were not sufficient for even a fortnight. The crisis was further compounded by rising prices of essential goods. All these led the government to introduce a new set of policy measures which changed the direction of our developmental strategies. Earlier, the Food and Milk Shortage of 1960s led to the Green and White Revolution, where India become the biggest milk producer in the world!
Table 2: Crisis and Emergencies in India that lead to big reforms
|
Period
|
Crises / Emergency
|
Reforms
|
|
1960s
|
Food / Milk shortage in 60’s
|
Green revolution, White revolution
|
|
1991
|
Balance of Payment (BoP) crisis
|
Liberalization in 1991
|
|
1992
|
Securities scam
|
Dematerialization of stocks, electronic trading
|
|
2007
|
Coal and 2G Scam
|
Transparent auctioning of Natural resources
|
|
2012-13
|
Double digit inflation
|
Inflation targeting by RBI
|
|
2015-17
|
Weak asset quality of Banks
|
Insolvency & Bankruptcy Code (IBC)
|
Source: MBAUniverse.com Research
Covid-19: Trigger to big reforms?
India has used the Covid-19 period to implement wide ranging structural reforms. Lets look at key Government Initiatives taken in last few months.
1. Boost for Domestic manufacturing
2. Labour reforms
3. Agriculture Reforms
4. Push towards Privatization of CPSEs
5. Land Reforms
Given the importance of the above developments, this is a hot topic for GD PI WAT for IIMs and other top B-schools and other entrance exams. So, keep yourself updated.
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