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New Economic Policy,1991.
A. Economic development strategy of India after independence. B. Negative aspect of the development strategy prior to 1991 C. New Economic Policy,1991 ( LPG Policy, 1991) Liberalization Privatization Globalization
adopted the strategy of mixed economy In the development strategy under the IPR. Objectives of such development strategy For fulfilling the basic objective of µ economic growth with social justice Private participation in the process of rapid economic development To prevent concentration power in private hands . Plan of action designed & implemented by the govt.1956. Economic development strategy of India after independence. through its various policies. The private producers were allowed to enter into some fields of production but were subject to controls & regulations by the govt.A. after independence The govt. 17 critically important fields of production were reserved for investment by the govt.
corruption & inefficiency in the bureaucratic process .B. Negative aspects of the development strategy prior to 1991 Prominent features of the Indian economy during the end of 80s & early 90s Decline in the rate of industrial growth Mounting losses in pubic sector enterprises due to inefficiency in production & distribution High fiscal deficit financed through internal borrowings Deficit in the balance of payments financed through external borrowings Decline in foreign exchange reserves High rate of inflation Heavy internal & external debt burden Malpractices.
in the form of Industrial Licensing Policy. New Economic Policy. rules & regulations under the policies (for greater participation of the private producers in the process of economic development of the country) . The policy changes under this were Dereservation of industries Relaxation of controls. Import Licensing Policy etc.C.1991 ( LPG Policy) The policy encompasses the following three strategiesLiberalisation Privatisation Globalisation LIBERALISATION To liberate or free the private producers from the direct controls of the govt.
. Policy changes under this were The govt. offered to sell a part of the shares of the public sector units to private entrepreneurs Adopted disinvestment policy Objectives of privatization to increase financial resources of PSUs & facilitate modernization to increase productivity & efficiency Autonomy of the private producers in managerial decision making For greater participation of the private producers in the process of production of goods & services in the country.PRIVATISATION Transfer of ownership & control from the public sector to the private sector.
GLOBALISATION Opening up the Indian economy to facilitate its integration with the economies of the rest of the world through trade in goods & services. largely contributed by MNCs Increasing foreign currency reserves Exploration of global marketing opportunities Technology transfers between countries . The policy changes under this were Removal of trade barriers like import licenses & import quotas Liberalized policy towards foreign capital Technology transfers for upgradation of technology Allowing competition from MNCs Objectives of globalisation Increasing FDI flows into the country. technology & capital.