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    New Economy Policy 1991

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    New Economy Policy 1991

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    NEW ECONOMY POLICY 1991

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    2 views10 pages

    New Economy Policy 1991

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    sontu.nb

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 10

    NEW ECONOMY

    POLICY 1991
    ECONOMICS PROJECT
    PRESENT BY “GROUP “C“

    NAME OF THE MEMBERS:


    Shreyam , Sathi, Shubhayan ,Muskan ,
    Mrinmoy, Ishant , Nandni,
    Subhajit, Krrish , Monty
    DEFINATION
    • The New Economic Policy of 1991 was a significant turning point in India's economic
    history. It was implemented on 24th July 1991. It shifted from a closed and controlled
    economy to an open and liberalized one. This policy was introduced to address the
    economic challenges faced by the country. It aimed to promote growth, efficiency, and
    global integration. It brought major reforms in various sectors, including industry, trade,
    and finance. The policy aimed to attract foreign investment and encourage private
    entrepreneurship.
    THREE MAJOR COMPONENTS OF THIS
    POLICY WERE

    1.Liberalisation 2.Privatisation 3.Globalisation

    Manmohan singh narshima rao


    ECONOMIC CAUSES OF THE CRISIS IN
    INDIA IN 1991 :-
    • 1. Foreign currency shortage.
    • 2. Overspending by the government.
    • 3. Tough trade rules.
    • 4. Heavy reliance on imports.
    • 5. Outdated industries.
    • 6. Troubled banking system.
    Need for Economic Reforms
    The economic policy followed by the government upto 1990 failed in many aspects
    and landed the country in an unprecedented economic crisis. The situation was so
    alarming that India's foreign reserves were barely enough to pay for two weeks of
    imports. New loans were not available and NRIs were withdrawing large amounts.
    There was an erosion of confidence of International investors in the Indian economy.

    The Following Points Highlight the Need for Economic Reforms in the Country
    1) Increasing fiscal deficit.
    2) Adverse balance of payments.
    3) Gulf crisis.
    4) Rise in prices.
    5) High rate of deficit financing.
    LIBERALISATION

    Liberalisation was introduced to put an end to these restrictions and open


    various sectors of the economy. It is generally defined as loosening of
    government regulations in a country to allow for private sector companies to
    operate business transactions with fewer restrictions. In relation to Developing
    countries this refers to opening of economic borders for multinational and
    foreign investment.
    OBJECTIVES OF LIBERALISATION
    • 1) To increase competition among domestic industries.
    • 2) To increase foreign capital formation and technology.
    • 3) To decrease the debt burden of the country.
    • 3) To encourage export and import of goods and services
    • 5) To expand the size of the market.
    • PRIVATISATION-It implies shedding of the ownership or management of a
    government owned enterprise.Government companies are converted into
    private companies.Privatisation of the public sector enterprises by selling off
    part of the equity of PSEs to the public is known as disinvestment.

    • GLOBALISATION-It means integration of the economy of the country with


    the world economy.Globalisation encourages foreign trade and private and
    institutional foreign investment.Globalisation is a complex phenomenon as it
    is an outcome of the set of various policiesthat are aimed at transforming the
    world towards greater interdependence and integration.
    CONCLUSION

    The New Economic Policy 1991 India was envisioned with a long-term goal of
    controlling corruption, inefficiency, and stagnation in growth. The economy was
    in turmoil under the excessive regulations and controls by the government and
    inefficient functioning of public sector units. In such a situation, the new
    economic policy introduced various reforms that brought new and innovative
    ideas toward building a base for the Indian economy tostand strong in the
    global forum. The new economic policy aims to boost the economy growth with
    major developments and making India one of the leading economic powers in
    the world.
    THANK YOU

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