(i) High input costs: The biggest input for farmers is seeds. Before liberalisation, farmers across the country had access to seeds from state government institutions. The institutions produced own seeds and were responsible for their quality and price. With liberalisation, India's seed market was opened up to global agribusinesses. Also, following the deregulation many state government institutions were closed down in 2003. These hit farmers doubly hard: seed prices' shot up, and fake seeds made an appearance in a big way.
(ii) Cutback in agricultural subsidies: Farmers were encouraged to shift from growing a mixture of traditional crops to export oriented 'cash crops' like chill, cotton and tobacco. Liberalisation policies reduced the subsidies on pesticide, fertilizer and elasticity. As a result prices have increased by 300%. However, the prices of agricultural goods have not increased to that extent.
(iii) Reduction of import duties: With a view to open India's markets, the liberalization' reforms also withdrew tariffs and duties on imports. By 2001, India completely removed restrictions on imports of almost 1,500 items including food. As a result, cheap imports flooded the market, pushing prices of crops like cotton and pepper down.
(iv) Paucity of credit facilities: After 1991 the lending pattern of commercial banks, including nationalised bank drastically changed. As a result, loan was not easily adequate. This has forced the farmers to rely on moneylenders who charge exorbitant rate of interest.

Monetary and Financial Sector Reforms:
Monetary reforms aimed at doing away with interest rate distortions and rationalizing the structure of lending rates.
The new policy tried in many ways to make the banking system more efficient. Some of the measures undertaken were:
(a) Reserve Requirements: Reduction in statutory liquidity ratio (SLR) and the cash reserve ratio (CRR) were recommended by the Narasimham Committee Report, 1991. It was proposed to cut down the SLR from 38.5 percent to 25 percent within a time span of three years. Similarly, it was proposed that the CRR be brought down to 3 to 5% over a period of four years.
(b) Interest Rate Liberalisation: Earlier, RBI controlled
(i) the interest rates payable on deposits,
(ii) the interest rates which could be charged for bank loans.
(c) Greater competition among public sector, private sector and foreign banks and elimination of administrative constraints.
(d) Liberalisation of bank branch licensing policy in order to rationalize the existing branch network.
(e) Banks were given freedom to relocate branches and open specialized branches
(f) Guidelines for opening new private sector banks.
(g) New accounting norms regarding classification of assets and provisions of bad debt were introduced in tune with the Narasimham Committee Report.

Monetary Reforms aimed at doing way with interest rate distortions and rationalizing the structure of lending rates.
The new policy tried in many ways to make the banking system more efficient. Some of the measures undertaken were;
i) Reserve Requirements:
Reduction in statutory liquidity ration (SLR) and the cash reserve ratio (CRR) were recommended by the Narasimhan Committee Report, 1991. It was proposed to cut down the SLR from 38.5% to 25% within a time span of three years. Similarly it was proposed that the CR be brought down to 3 to 5% over a period of 4 years.
ii) Interest rate liberalisation:
Earlier RBI controlled (a) the interest rates payable on deposits (b) the interest rates which could be charged for bank loans.
iii) Greater competition among public sector, private sector and foreign banks and elimination of administrative constraints.
iv) Guidelines for opening new private sector banks.
v) Banks were given freedom to relocate branches and open specialized branches.
vi) New accounting norms regarding classification of assets and provisions of bad debt were introduced in tune with the Narasimham Committee Report.
vii) Liberalisation of bank branch licensing policy in order to rationalize the existing branch network.

(i) Foreign exchange reserves started rising.
(ii) There was a rapid industrialization.
(iii) The pattern of consumption started improving (or deteriorating).
(iv) Infrastructure facilities such as express highways, metro rails, flyovers and airports started expanding (but the local people were thrown away).

(a) High Input Costs:
(i) The biggest input for farmers is seeds. Before liberalisation, farmers across the country had access to seeds from the state government institutions.
(ii) The institutions produced own seeds and were responsible for their quality and price.
(iii) With liberalization, India's seed market was opened up to global agribusiness. Also, following the deregulation many state government institutions were closed down in 2003.
(iv) These hit farmers doubly hard.
(v) Seed prices shot up, and fake seeds made an appearance in a big way.
(b) Cutback in agricultural subsidies:
Liberalisation policies reduced pesticide and fertilizer subsidy and so fertilizer prices have increased by 300% and electricity tariffs have been also increased.
(c) Reduction of import Duties:
(i) With a view to open India's market, the liberalisation reforms also withdrew tariffs and duties on imports, which protect and encourage domestic industry.
(ii) By 2001 India completely removed restrictions on imports of almost 1,500 items including food
(iii) As a result, cheap imports flooded the market, pushing prices of crops like cotton and pepper down.
(d) Paucity of credit facilities:
(i) After 1991 the lending pattern of commercial banks, including nationalised banks drastically changed.
(ii) This has forced the farmers to rely on moneylenders who charge exorbitant rate of interest.