What was the major impact of India’s New Economic Policy of 1991?

What is the impact of new economic policy 1991?

The New Economic Policy of 1991 included standard structural adjustment measures including the devaluation of the rupee, increase in interest rates, reduction in public investment and expenditure, reduction in public sector food and fertilizer subsidies, increase in imports and foreign investment in capital-intensive …

What are the main features of new economic policy 1991?

The main characteristics of new Economic Policy 1991 are:

  • Delicencing. …
  • Entry to Private Sector. …
  • Disinvestment. …
  • Liberalisation of Foreign Policy. …
  • Liberalisation in Technical Area. …
  • Setting up of Foreign Investment Promotion Board (FIPB). …
  • Setting up of Small Scale Industries.

Why did India change its economic policy in 1991?

The general price level rose consistently due to increase in money supply and shortage of essential commodities. 3. Fall in foreign exchange: The foreign exchange reserves were at the lowest level in 1991 that led to a foreign exchange crisis in India.

What is the economic policy of 1991?

The policy had measures which came under two heads: Stabilization measures [short term measures to control inflation and correct balance of payments] and Structural reform measures [improve efficiency of economy and increase international competitiveness by removing rigidity in various economic segments].

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What was the Indian economic policy before 1991?

The Indian economy of this period is characterised as Dirigism. Before the process of reform began in 1991, the government attempted to close the Indian economy to the outside world. The Indian currency, the rupee, was inconvertible and high tariffs and import licensing prevented foreign goods reaching the market.

What was the Indian economic policy before 1991 Class 12?

Prior to 1991 Government has imposed several types of controls on private enterprises in the domestic economy. These included industrial licensing system, price control or financial control on goods, import licence, foreign exchange control, restrictions on investment by big business houses, etc. ii.

What was the one major proposal of new industrial policy 1991?

D) Facility of direct foreign investment upto 5l% in high priority industries. Correct Answer: D) Facility of direct foreign investment upto 5l% in high priority industries.

What is the new economic policy of India?

The new economic policy of 1991 brought a sea change in the Indian market and economy. The government, with this policy, did many reforms and went ahead with radical policy changes. The basic idea that India was a socialist country was challenged by the New Economic Policy, 1991.