The economic liberalization reforms of the 1990s in India were a series of significant policy changes that aimed to transform the country’s economy from a highly regulated and state-controlled system to a more open and market-oriented economy. The key factors that led to these reforms were:

1. Economic crisis: India faced a severe economic crisis in the early 1990s, characterized by high inflation, balance of payments problems, and a stagnant economy. This crisis created an urgent need for economic reforms.
2. External pressures: The International Monetary Fund (IMF) and the World Bank, along with other international organizations, pushed India to adopt economic reforms as a condition for providing financial assistance.
3. Changing global economy: The fall of the Soviet Union and the rise of globalization created new economic opportunities for India, making it essential for the country to adapt to these changes.
4. Domestic political factors: The Indian government, led by Prime Minister P.V. Narasimha Rao and Finance Minister Manmohan Singh, recognized the need for economic reforms and was willing to implement them.

The key reforms introduced during this period included:

1. Trade liberalization: India reduced tariffs and import restrictions to increase trade and attract foreign investment.
2. Devaluation of the rupee: The Indian government devalued the rupee to make exports more competitive and reduce the trade deficit.
3. Privatization: The government privatized several public sector enterprises, including banks, insurance companies, and other industries.
4. Deregulation: The government removed many regulations and restrictions on business, allowing companies to operate more freely.
5. Institutional reforms: The government established independent regulatory bodies, such as the Reserve Bank of India (RBI), to manage the economy and regulate financial institutions.

The impact of these reforms on India’s growth trajectory was significant:

1. Economic growth: India’s GDP growth rate accelerated from an average of around 3% per year during the 1980s to over 6% per year during the 1990s and beyond.
2. Foreign investment: The liberalization of foreign investment policies led to a significant increase in foreign direct investment (FDI) in India.
3. Inflation control: The government’s inflation targeting framework, introduced in the late 1990s, helped to control inflation, which remained relatively low throughout the decade.
4. Increased trade: India’s trade volumes increased significantly, with exports growing at an average annual rate of over 10% during the 1990s.
5. Poverty reduction: The economic reforms contributed to a decline in poverty rates, with the proportion of people living below the poverty line decreasing from around 35% in 1991 to around 20% in 2005.

However, the reforms also had some negative consequences, such as:

1. Unemployment: The liberalization of industries led to job losses in some sectors, particularly among unskilled laborers.
2. Income inequality: The reforms contributed to increased income inequality, with the richest 10% of households capturing a larger share of national income.
3. Environmental concerns: The rapid growth driven by the reforms led to concerns about environmental degradation, pollution, and climate change.