Economic reforms in India have been widely criticized for failing to uphold social justice and welfare. From a fiscal perspective, the reforms placed limits on the growth of public expenditure, especially in social sectors. Policies involving tax reductions and tariff reductions did not yield larger revenues, and tax incentives given to attract foreign investment further reduced the scope for raising tax revenues. Consequently, this has had a negative impact on developmental and welfare expenditures.

Viewed from the Indian context, the reform policies are argued to have aggravated the inequalities deeply rooted in society. The growth benefits have been concentrated among high-income groups, improving their income and consumption quality. Growth occurred in select service sectors like telecommunication and information technology, rather than agriculture and industry, which provide livelihoods to millions.

Moreover, though GDP growth increased, the reform-led growth did not generate sufficient employment opportunities. The process failed to address basic problems in employment, agriculture, and infrastructure. Thus, the reforms are seen as benefiting specific sectors and groups while neglecting the broader welfare of the population.