2. ๏ UNDERTAKEN SICE JULY 1991
๏ VIEW TO INCREASE THE PRODUCTIVITY AND
EFFICIENCY OF THE ECONOMY.
๏ REDUCED COMPETITION
๏ CREATING MORE COMPETITIVE ENVIRONMENT
NEED OF NEW ECONOMIC POLICY
๏ผ DUE TO ECONOMIC CRISIS 1991
๏ผ LOW FOREIGN EXCHANGE RESERVE
๏ผ INCREASED IN NATIONAL DEBT(FISCAL
DEFICIT)
๏ผ PRICE RISING
3. 1.LIBERALISATION
โข Liberalising the economy against unnecessary
controls and regulation
โข Abolished the system of industrial licensing
except 8 industries
2. PRIVATISATION
๏ Widening the scope and role of private sector
๏ Introduction of private ownership in public
owned units
๏ Greater participation of private individuals
๏ 55% contribution by private sector for the
development of economy
4. ๏ Credit support to private sector from financial
institutions.
3.GLOBALISATION OF THE ECONOMY
๏ฑ FDI is allowed in high technology and high
investment priority sector
๏ฑ No permission was required for hiring foreign
technician
๏ฑ Rupee has been devalued, so export was
increased and import was restricted (outflow
of foreign capital)
๏ฑ NEW EXIM POLICY 1992-97 was introduced.
Improve trade (export โimport) practices
๏ฑ Custom duty was has been reduced from 250%
to 35%
5. 4. NEW PUBLIC SECTOR POLICY
๏ฑ Emphasis to shift public to private sector
๏ฑ Reduction in list of reserved industries to 17
to 8
๏ฑ Sick PSE (public sector enterprises) policy
were redesigned.
๏ฑ Disinvestment of shares in PSE and
encourage the investment to private
sector(general public)
5. MODERNISATION
๏ฑ Introduction of modern techniques in
production system
๏ฑ Growth of electronic and computer
industries in economy
6. ๏ฑ Corporate merger and collaborations is
allowed to face new challenges
๏ฑ Modernisation of sick units (public and private
both)
6.FINANCIAL REFORMS
๏ฑ Reduction in liquidity ratio( CRR, SLR is
reduced so people have more money and
boom in society)
๏ฑ Reconstitution of Banking sector
๏ฑ Giving more freedom to banks and ending
dual control of RBI and Finance Ministry.
๏ฑ Introducing capital market change
๏ฑ Liberal treatment to foreign Banks
7. ๏ฑ For recovery of loans special speedy
machinery were established
7. FISCAL REFORMS
๏ฑ To reduce fiscal deficit
๏ฑ Initiative was taken to reduce public
expenditure by increasing Taxes.
8. ๏ ALLOW ENTRY OF PLAYERS
๏ ECONOMICAL BENEFITS
๏ CONTROL INFLATION
๏ INCREASED IN FDI
๏ INCREASE IN TOTAL PROFITS
๏ EXPLOITATION OF WORKERS
๏ LACK OF LONG TERM VISION
9. ๏ EFFICIENT UTILISATION OF RESOURCES
๏ HIGH QUALITY OF SERVICES
๏ MINIMISING THE LOSS
๏ REDUCE MALPRACTICES
๏ LESS POLITICAL INTERFERENCE
๏ REDUCE IN PERSONNEL PROBLEM
๏ EXPLOITATION OF CONSUMERS
๏ NO CHECK ON MONOPOLIES
๏ UNECONOMIC SERVICES
10. ๏ HUGE AMOUNT OF FORIGN INVESTMENT
๏ UPDATED TECHNOLOGY
๏ FREE FLOW OF CAITAL
๏ LOWER PRICES WITH HIGH QUALITY
๏ INCREASE IN INDUSTRIALISATION
๏ PROVIDE EMPLOYMENT
๏ REDUCES JOBS AND INCOMES
๏ POOR LABOUR PRACTICES
๏ RISK AND UNCERTAINITIES