In 1986-1987 the foreign exchange reserve of Rs.8151crore decreases to Rs.652crore. POOR PERFORMANCE OF PUBLIC SECTOR ENTERPRISES:-This is a sector owned by the government and they have invested a lot in this sector and this sector is not doing well due to political interference. Finally I would like to conclude that economic liberalization has increased the private sector's role and responsibilities in the economy as well and now there is a decrease in government control over economic affairs. Reforms are now more expected to liberalize the economy more to create a good environment for rapid growth and development. And also the success of the economy also depends on all the concerns of the people related to the economy. FINANCIAL SECTOR REFORMS: Financial sector reforms means reforms of the banking system and capital market. There is an efficient banking system that mobilizes family savings and channels it towards productive uses. The weakness of the banking system was analyzed by the Financial Sector Banking Committee