ECONOMIC REFORMS 1991 : LIBERALISATION Class 12 Indian Economic Development #bestnotes
ECONOMIC REFORMS SINCE 1991: NEW ECONOMIC POLICY NEED FOR NEW ECONOMIC POLICY (A background story) a) Earlier, the public sector had a dominant role and the private sector was under controls and checks. b)Import substitution policy implied minimum possible international trade, c) It was realized that GDP growth did not increase to the level desired. d)Economy was slipping into crisis. e)India was granted a loan of US $7 billion from the World Bank and IMF. f) Our economy was compelled to announce NEP. (New Economic Policy) ELEMENTS OF NEP (NEW ECONOMIC POLICY) AND ECONOMIC REFORMS (i)Liberalisation (ii)Privatisation (iii)Globalisation Thus, LPG was set to replace LQP in 1991. LIBRALISATION · Freedom of producing units from direct controls of the government. · Why Liberalization? · Before 1991, private enterprises faced licensi...