Thanks Mary. And that is a wonderful question which you asked.

Economic Reforms means changing the economic policy of the country in order to improve the living standards of the people. When the government believes that the current policy is not sufficient to improve the quality of life, they will introduce a wide range of policy changes which will help to augment the growth.

First generation reform happened in 1991 . Till 1991, India’s growth was very slow. The average GDP growth was less than 3.5% since Independence. India had to go for policy changes and the policy changes made at that time is considered as first generation reform.

Second Generation Reforms — The government feels to accelerate the growth from where we are now, the existing policies are not sufficient. We need to do more to sustain and increase the growth rates. How the growth can happen?

Some of the reforms could be –

• More private players in banking and insurance sector
• Opening up retail to foreign players (and other FDI liberalization)
• Tax and labour laws reforms (introducing Goods and Service Tax (GST) is one among them)
• Change in land acquisition policies, allocation of natural resources, etc

And now GST is implemented which is one among the reforms in second generation reforms. Hope it clarifies your doubt.