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New Economic Policy (1991)
New Economic Policy (1991)
New Economic Policy (1991)
Prepared by:
Supreti Tyagi
Economic Background
1948 - 1956.
Public sector dominance.
Limited private participation.
1956-1980.
Industry classification.
Industrial licensing policy.
Economic background
(cont..)
1980 – 1991.
Growth rate of 5.4 percent per
annum.
Limited liberalization measures were
initiated.
Steps were taken to modernize some
of the most important industries,
such as cement, steel, aluminum and
power generation equipment.
Cause of the Crisis-1990
financial sector.
Capital market.
Liberalization
Privatization
Globalization
Liberalization
Except the six industries , all other kinds
of industrial license have been
abolished.
acquisition
Globalization
Free flow of technology
Free movement of labor capital among
different countries.
Reduction in trade barriers.
Outsourcing
Impact on industrial sector
Multinational products was
dominating local industrial
production.
Shortage of electricity and other
essential raw materials adversely
affect the quality of goods.
India lifted all control & quota
restriction on export but America is
not ready to except the import.
Effect of new economic policy
(positive)
Increase in GDP growth rate
Increase in foreign direct investment
Increase in foreign exchange
Outsourcing
Effect of new economic policy
(negative)
Growing unemployment
Neglect of agriculture
Growing personal disparities
Infrastructural inadequacies
Wide spread poverty.
Demonstration effect (luxury goods)