The document discusses India's New Economic Policy introduced in 1991. It aimed to liberalize and open India's economy to private and foreign investment by reducing import tariffs, deregulating markets, lowering taxes, and allowing greater foreign investment. Proponents credit it for spurring high economic growth in the 1990s and 2000s, while opponents blame it for increasing poverty, inequality, and economic problems. Key aspects of the policy included liberalization of the economy, privatization of state-owned enterprises, and increasing globalization.

1. WHAT IS NEW ECONOMIC POLICY ALL ABOUT ?
• It refers to ongoing economic liberalisation or relaxation started in
1991 of the countries economic policies
•
• It was introduced with the goal of making the economy more market-
oriented and expanding the role of the private and foreign
investment.
•
• Specific changes include the reduction in import tariffs, deregulation
of markets, reduction of taxes, and greater foreign investment.
• The liberalization has been credited by its proponents for the high
economic growth recorded by the country in the 1990s and 2000s.
•
• On the other hand, its opponents have blamed it for increased
poverty, inequality and economic degradation.

2. BRANCHES
OF
NEW ECONOMIC POLICY
NEW
ECONOMIC
POLICY
Liberalisation Privatisation Globalisation

3. Liberalisation
The first aspect of new economic policy was liberalisation
• Liberalisation of an economy means removing or relaxing
government controls and restrictions on economic
activities
• Relief for foreign invertors
• Revaluation of Indian Currency
• New Industrial Policy
• New Trade Policy
• Import Technology
• Encouraging foreign tie-ups
• Privatisation in Public Sector

4. Privatisation
According to World Bank, “Privatisation is the transfer of
state owned enterprises to the private sector by sale of
going concerns or by sale of assets following their
liquidation
• Increasing inefficiency on part of public sector led to
privatization
Forms of Privatization
• Denationalisation
• Joint Venture
• Leasing
• Franchising

5. Globalisation
• Globalisation means reduction or removal of
government restriction on the movement of
goods and service, capital, technology and talent
across national boundaries.
• It is the increasing interdependence, integration
and interaction among people and cooperation
in various locations around the world.

6. Impact of NEP 1991 on Indian
Economy
• a) Increasing Competition
• b) More Demanding Customers
• c) Rapidly Changing Technological Environment
• d) Necessity for Change
• e) Need for Developing Human Resources
• f) Market Orientation
• g) Loss of Budgetary Support to Public Sector
• h) Export a Matter of Survival 23-09-2014
Economic Policy 1991 11

7. Objectives of 1991 Policy
• to unshackle the Indian Industrial Economy from the bureaucratic economy.
• to introduce liberalization with a view to integrate the Indian economy with the
world economy.
• to remove the restrictions on FDI as also free the domestic entrepreneur from
the restrictions of MRTP.
• the policy aimed to shed the load of the public enterprises which have shown a
very low rate of return or incurring losses over the years
• Liberalising the industry from the regulatory devices such as licenses and
controls.
• Enhancing support to the small scale sector.
• Increasing competitiveness of industries for the benefit of the common man.
• Ensuring running of public enterprises on business lines and thus cutting their
losses.
• Providing more incentives for industrialisation of the backward areas
• Ensuring rapid industrial development in a competitive environment.

8. Statistics
• GDP$2.047 trillion (nominal,Oct. 2014)
$7.277 trillion (PPP,Oct. 2014) GDP rank10th (nominal) / 3rd
(PPP)GDP growth 5.8% (2014) (IMF Projection)
6.9% (2014) (Official projection per 2014 Methodology)
• GDP per capita
• $1,625 (nominal: 130th; 2014) $5,777(PPP: 127th; 2014)
• GDP by sector agriculture: 13.7%, industry: 21.5%, services: 64.8%
(2013)
• Inflation (CPI)CPI: 5.11% WPI: -0.39% (Jan, 2015)
• Labour force487.3 million (2013 est.)
• Labour force by occupation agriculture: 49%, industry: 20%,
services: 31% (2012 est.)
• Average gross salary$1.46 per hour ($3,036.8 yearly in 2010)
GNI per capita: $1,570 yearly per person (2013) Average household
income: $6,671 yearly (2011)
• Main industriessoftware, petroleum
products,chemicals, pharmaceuticals,agriculture, textiles, steel,
transportation equipment, machinery, cement, mining, construction