-

~.rR ODU CTIO ~

S.1nu..
lnd•p,ndu:.u . lad&c.. Ccs:ni.11. --..
c.ud ~'?U(. '1,-rlll.lll. i 7 ~ 1..L .llJiall:!!J.aau
:..& cl !be.. omW ~ .s_,.sl,-.~W i&l ~ 1
~ with.. ~ cl.. 1L.. pwu:d c~ie .s:,.a!tm (~:.inl..£l
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• ~.td- "JSc:u ~ c. 1-.1,ec. IitvuL:zn:_ tn. ~ .p..lii,
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a•a.l.h.. -'ld dr•C::rmc:::t
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a:u.,d:...~
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~..-to toe:! ~,a, th."-cce~ "'-£l~ t1p:,ncion .r.:.
~I i::i.1 iin ~ Clalp,!
 THE NEW
ECONOMIC POLICY

1E.t n,.. ~ " ,We; IJltJ'J ...- ~ ~

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Jlil.-iA

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•-: ~ AA4 .u:.•~ 'of. ~ ~!C>IK
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t•~'" IC.ill~

it.:. ~ At. ~ tt.d acl .U Id u. ~ fa•£Wl

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, u u . u ~ .to a. t,.u! 1W ~ 11:.i ata..,.ll.
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@ Refo~rns
liken duri
liberal on ~
l
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 Trade & Investment Polley Reforms

.&ic1.LJ.!.:U•....a. tot .oL 1e&uicf.oas ( biali. jQ.7-jff4 And .qllrJ:uJ

wue.. impostd .on..• Ja:padL.la. FJ~ :the.. .dome.die. jndwl ritS'
~o.J!a... :ufm:m.s..Jn fhc._ hude. Dnd .inllufcntol po~y_:i.Jll'fe..
~te.d:
~-Jo.._lrxn.a.se.. .the.. lnluruillo.ruiL.ccmpditiv~ d ind J bi.a.L
ptr.dudian..._
• lo ~u.:r~"fl. im-eslrneofa n n d J ~ ~ J ~
• A _ ~ e££icie.~ ..oUcc.ol in.dwlhiu .A.ad .ad.lplirn.---11(
modt.:m. tu.h.aoloai.es
Jfie__£mpodan.Lb.adt...ond. in~lcunLpA!iLy i tfouns.. focludt..:..

L 2emaVD! .af G.ucnlihillve..-=r.e.salcllons .an.. tmpaw .and .sxpa,h •

.l1nlb:s 1be. fle..J.-.6canomi.c.Pclrcy~ ~nlilalia Jeh.idicns on
unparls. .orui UJ)O.T1s .IQLte.._ 'J %e.auc.e.d

o po1l dutiU4.lUe..Te.irur,
144e,_ ·11f'O.WU!tl. of_ -lruflan.-aaads
Jatumlicru:i.L JIIATUU-

r tfoo jn_lmpod...IMiu
o.tion. ~ t • i'a A~!em.

' '
'
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I

- _______ J
...♦ Tax Reforms

~ - Tn.x Tefo'llns ~efeT lo 1eftrrm& i11 -save:trunertl :S

...,,,.__,_

- .and public. e.pendituTe. polides.. whl,h.. IUL- CJllla.clIYe.ly

'
... - known... o.s lt.L'.fi.sc41. P.olic.y: Tiues .o.-re of lwo...t.ypes : -
Taxes can be classified into two • Dii:e.cl Ia.,.u ~ t oL tcues_on in.c.ome.s _of Codi,iid11ol
types . .o.s...1t.1£11 ll.S p-rorn.s ct bu.sinus enui:p•ises.
foy uomple - lnc.otnL.. tOJ< •- Co•po-rAl:e... tcu~

.I
• lndl-..ecl T0J1e.s nfe.-ra lo lho.se l~e..s klhrdLAU.e.cl lhL
inc.ame. ond. pi:ope.i:~ of puson.s. l~b... llu!.TT _

Ir n
-;.~-·: - ~;,001
Tax
C0114UmpHort. eapenditun.•Jn.diYecl tcu..e.s ..o.:rL-aene.-:Jo.lly-
lmpo.s.m on-aoods~Qt\4 .seivices., -- -
hi...- uomple- Oiood.A llrul ..S . s. Ttu.. (G..6T1...

_Jli_e .mo..jM T~ &.e mooe JUe.:

1- Rt.due.lion in TAxe.s
L At.f.oun.s... in. ln.diT.ed 14xes
......,........,,, il cpimpllftcofion .of ..hoc.es&
,;
!n8LJ\d lo/0.S po.6.se.djn Hie l'A:ilio.mw
10-~ mpll~ aru:I fnl 1
. lndr !let
11

,
 Foreign Exchange Reforms

Deval 11ic imp0.1lonL__u!.o:rm.s... mruie.. 1n fo1e.~n u~e_______

of _mo.1ke.Ln:r.e. :
lndi
111111111.-~ .i . ne...voluolion. .of IL.apu.: .0f.llo1uo.Hon. ufe.IB.1CJedudion..
...
fo the. vol ue.._of dom~Hc._
r.ur.renc.y by the. ,aovurun.en.t To ove.•comt-Boiaru:.e. d..
Po.'lmwta .aisiB. 1~ xupee..._ wo..s_devalued ~o.in..1t
lot!!\3n.. .cun.cncl.e..s......1Jii.s l~ to t:ln.. in.c..-e.o.,!UL-in 1h,c_
tnfuiw nf io...-~ ~ ' -

.2.... P.l'cnktl .Qe.tumincillon of £

__.0!l01<1ed ,:upee....
vo.h.tLl!L.b~ he.e i~am. i :.conhol E\.:i o._,e..suU,_
Tke.l fo•r.e.s ___..g.-,r1Jtu111--And_aupply dde'IJiline.....
.tAC.Nlt\9e v .lhe...J.adl.o.n... iupe.e_irL_lei:m.1
• foTeian. CU'ITlllC~•
 ---- -~---.,;a.- - - - - - - OaN

Flnanclal Sector Reforms

, Eiooociol .sedo1 ioclod~oo.nclol fo~Ht.ut~ like..mmmeiciw I'

• ~•..i11111..dmenl b<lnls•...slnclt e.,~e.J>pu:olion&...And
. -Jo.wan- ~ e...JUA.tW~"iitlinonciAL..sedcu. ,n._lndlA. i.s_
. - •- .u.obolled..by lh~ciL&nL: Rfil..__ __

.L .ChanJL In....RclLnf...R81..i.1rlf.._ro1e....oL ~ I w~ _reduce:LhQlll.

:r~la!o1 lo.-lncilillliol' of...l,tlArlciol

~ in £J1:~ion Pxnceu : i8.ankd._ s.Jeu...&v

J1 udom.. to
.sei
ew..Jmlllche..s Wlu fuUillmw oLc.e.Thua.. .condi
• ~ 9P _nf th.e. R.81
 lndustrlal Sector Reforms

ln ndn !Cl muu. nu.,.i..A>y niA,in&. In lli<.. w ....lrlo.l

Reduction Decrease In ...utlo:i. lbt.. l»,urunonl lnhC>tlu<Ld lls. .n,,.. .adu.obio.1
In Industrial role or Public M =- '"'~ 1.~. WJ.. 1liL. ,._,,.,.,. ,,....,su,.a un,lu
Licensing Sector - ;n,i.;,t,jo.l ~ ul,.1m. lnda.dL~

L.r.m.<IIAn.. In. lnd~IAI LluAli~ ~lhL n,-. pall<lf ~

WwahlAl ~ ks
All .Iha. p•~tub• uai>l IA., "- •IM>sl U..L,il ,ad~•h<U
LL...._ ll\uta1. d•i-• "\ulpm1nl&.in.du,h:..I u¢,wvU.d<-l

2...0te.s«.ll In ,Alt. Af P..t.1" S1<l01 lh1. nunl,u .oL iftd..at-r{u

e.,.tluol~ly ••.snvtll
L» I~ put,l" mm 11 lo. J lr>A,.al,lu..

!. l>t.••uu •tr· · c.ol, indu&hlu~.111,,n~ .'!0'"4~ "!11.

pmdu<M ►
fft~ ~t.Glt.. m.aud"'llU ho_._._ nAw bUA.dt.•"lt4&nt.d

De-reservation Monopolies
under and Rntrlctive
Small-scale
Trade Pracllces
(MRTP)Act
Industries
 -- ->PfliVATiSATiOf+/

, .tl....l. - ttoasfu ,ii_ £""'°4hiP• """"'6-,,t

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pm,...a In ~ px!,i>lt._ .41!.Ul
fsl""l~I= lmj,Uu ~•14lU. a,lt..of_ lhL p,1....te..udu
I.a.. lhL ~ AdMllu- ,.f U... UllnlTI
l:::d• th<. =.
1
Jn.dkuL r..,uNnar.l i.u diwtO<i l4
.!JAkL. ln. .n,u.1 pubUG. ;,niap1i£u, indwl"6 IW-~1U..
l"l<>•wl Ud~'!'l~tlc...
f 1i,,.i..,.lion.CAn bl. dent. in. 1..,._ ~ :
l... T-aiu al hlD,uhlp o.od mll""/l.-nl oL ~ ' ~
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lhL.t,,,m s.do,.
2. ?:ii""1~ th, ,..slilAI andulnlc••1ut.111.l.
by ~ • • th, ~.iLJ ,ii_ t.sll.s. {,,_.la
.pulill<... l!il.i. ~ } .....0.. ""'- dl.>iaY..,.lmtAl

1F.,...plllp<>&e ol p11v..!u..l:lcn. ..,o,,a. mainly ID. il!IIWl""-

~ . d ~ lUld I,..cita,ac.. rnodnniso.li~
ll - Al,.o lliwtd. lh<>i ?l"4iL LO.plm1 4D4 ~ • a l

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belp.a.
lbL P.51.1&..
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 (fLOBALiSATiOfJ

fni,,~olisat.on mr..o~ .inl~uiti"fl lb.L n<>l!Anol = ¥

...~ .14 -•Id.. e=iom,;l.al .lhi. .ccunt., 11 .llu~i...
:IUIDV!U. .cl. ~A.:nlt.n. -""- ~•MlimAL h:i.dt.. GDd.
.u,,ptbl.-~nu

• ~~ i.&. atnuo!l~ JUl<k1.d.w! l11a mmn. int~1..tic4

.c.!. !he. = y .d: .lhL =ct,~ ..,;1i.._ 1hr. .-_,Id
=y
• .liw,,,u.Jl 1&.A...tmlfllu pb•ocrneDM ll lJi. ~ ...~
nl l~.u.l .of l l . 0 f>Olicita.
.1 .lhal7• · lo. tuu,slc.1111
e•wu
.lat.. Wtlld tr.;,;,:nu, .ii.It: AM
.lirua•Afuii..
• l1 i.a,,d.,u a~, ..._ ~ .An<i. uU..W<..1.. ln:i&.-
~ ccucmic «snrl:>l -und ~ ~xiu...
IA.. .ili.,l.
WClld
e~n.. ~ .to. .c.tWL-A. btdulr.::s.

--
P...QSffiVE EFFECTS Qf GLQilALIS.ATIQtt;
• Better quality products for
consumers at lower price.
• Wider choice.
• World wide market for Indian
producers
• Helps in Capital Formation.
• Employment outside India.
• Access to better technology.

NEGATIVE EFFECTS QF c.iLQBALISATJQN :

• Brings threat to I locol Producers
• Outflow ,on currency by woy of
profit of MNCs
• Mokes the country dependent on others
• Lock of public Interest.
• Exploitotion on employees
• Disrupt the sociol ond cultural life of the
people
 I
Changes made by the G\obal\sat\on
of the \nd\an Economy I
1..1ht.. tit"'" Ctcncmk. ~ i,ui,r.sui ~ ~ d .!Jal cf.
hijL • ~ 1 .Dai ~b.. .wuimut p11A.1it, IM.aht~
.in ~ .DJ.W>a><illc. pamlul=. ..-au..ir... .A>S>.lbl,Jt. ""
L.,~.d:.,a.l iosrat 1Dtot 4 h =i:&• .cui1 ,,Lit.nian.~,~

2..1o- 2u;,ci. .! un~n. ~~ 1 l d ~ ~ ~

f&lllwl= h ¥=iouJi ,n..
~IL ll,ic_,"ty lNLabJJ ~
... .._......__d ,~.Loan,~

~-
---
tr... lbe Indian .unoc,,,.'j .J\lun.
'ff'4 11ediltc! la.C.,!l.t,'ffl
..
 ;.a,
....-y ►- -
World Trade Orgamsalion
. (WTO)

P1ui1
CcrAr.rtc hl.."J'.O I "eon
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i4~
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A • O')tfflh"
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o.ta...,d I u& I Ullh lU-
1111
1u f<>dy u p,. •
lhL W>lAAUCII L,.r tr. • IL
t.. ltd OU I uI4&. ~ U .
Gil A.. .wibG:h.o.1. h.&lA..
~ • la.. .llllL- ,J Iha.. wt .o,.i"-'D&& Jh&.
~ •.uul>I p>OUU
U 1tA.A lnhn.,lllod In 'ltwil. 1""°"
,.t h.a1
•-=
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lolumAllill. ~1 1rrl
ktl!L. lh,,.hlp.AI. J!::dU~ to rem= n,r;; ,::o. ~.I!,:. u..•
1/Clu.. ""4, v......i. d.>I"- in. 11.1pa:t. .al. Jhu.o. ~ ~
ad JI.Gd_ .lu<L&ml' ll..t~·
1~ • .:• .eca•·n• •
•'""""1 b..ahu~
ha.Ltccm,_ n. d....lioo1" •
LU. 14..l'lbla.& .bi. ~ 'GU.I.. W
·1,.cf. • ~ ~ .

..£ llt<. 4Lniu.a...auw,.u td_ .b.. ~ ~ •

~~ fl•~--~·- .

-
l bet•t •l on Prtvattu1 on
•nd Ctobatlutton
~ lntndla
Economic Aoforms
~ndla ~ nfoH>S .t.tto.ltd.. .ma.ed. • ~ Ai.
.dlilL1:m lbtla
JLo._ Jlfll'I~ UJ., poi.Liu_ lc;!:u. - - ~
.r.l. lllU' Ult.... ~ !d:L.,l .u =- ~
~.&fu,,,.._.inifu.ld .,.:au. 1llL.

T
$,.f•jzj•,•@•'I (d!Et@~
 Arguments In favour of
Economic Reforms

lAt.. fullt:wi~ 11.u• .IJUoL. .ct .ik ~,hut!. A\, m•a•s

llll""""d Z... h-.i 4L ~ uL::rm.s;.

b,a....,__iA. ut.t. cl ~fu...A.• ~M~~-

.c.!J!
~ mc- .!1.. ~~ %AJA; u...ar.::.4.. .i.a.
....tioiohd .c,l 1·1.L.AoL.anp:,.u:i . b l . ~ ==-.:a!
'i.l l. :a. -2til.-.ia.

z.. ~ IA,ul=L;_ L. ~ e...:.

.ha.a..ir:i.la..J!,s..:m;1:i_
_., .ta.._ ~.d...u:d.. :-C,• I.SU
trrart
 Criticism of
Economic Reforms
Demonetisation
 ea:-ot• eefk,n, .Lt • ••
~ - . . , . ...,...._, L -
, ..... ~ k w h - a a i t .
&&bU. ~..,,.._Ju.!:-; .11.r..i. . . . .,
'.....,.,.,...s_ ad.,-., -All A-
Ulft'etflwtfM .u. Alu, Wt•,rntut Ao& .c... .&U!l.-.
pnl Iii p,......t. ~ t!JA1 tu ~ .__ a:;.
~ • .I• .lolu.,lu r At<41d

.&la-. i,d J&_

iu,-:ll(M.,.ft.ic,A,i
I ~ ..,..i...
i laia.a • .,.. la

1-'loa.JWD..
U!J. La..
•IOA!I~
 l
It i• o. ;~d 11141 !ht 'ftfO'Tffl. p,ocua
-,;11 r.ol h e>llt lo <>•lu,vr ii.a 1cce
tro~•· obJtcf:..,c• b ~ of t6c•11·w~
,,.:,at, pn,t.C:PQI en lo th, =""/ <l"'1
lht p>i• •• .u,Jc, ;, IC•' 'lhdtd "'1
tht •·J•~••••
c• p>tl"f ..,,,,,n,.scf:On.
Wo c U lht 1:10<1 '" n f7Yoca. ""-4
Jtdoctd 1hr ult of p..tl" std!: r ""u!
Mt•I. Bol "1 . , _ fu;1e,1 lo Im lht
>.c.cuoi C1114hd I>.:, t!ie ,,>lhd,o,...
P',lt. ,uclo, invr-.,t,.,.,..t :f\ •ntTuh:d "'
"1C-U .so :. tht lo.cl ••<nd IA!u
Ob,:wly '"'• con, !o, o. u •~ or
I~• ufo,., i n ~ ' l d "'''":I '°",d;._
mf"1.dJu115

1!\e th,.t ..,._l f-1 •••• or n«'r.lluol:C,,

p,;..,,tr..t:cn or,d Jlabc>l:....t·c-, I 1.16
ialttd to ""''• o. ~ .. t Cl\ th• p,ct;,.,.
of v••mpl~"'"u llir ...~ . nla,.,,
f'IX&S.S rnol,.. at leut o~• 11,;1!
clea, - t~1 111<ul1t Po.co.s d