NEW ECONOMIC POLICY : PRESENTED BY:
SANJAY KUMAR NEW ECONOMIC POLICY Objectives Of NEP : Objectives Of NEP Reasons For NEP : Reasons For NEP Fiscal deficit was 5.4% of gross domestic product in 1981-82 which rose up to 8.4% in the year 1990-01.
In 1991 amount of interest liabilities rose further to 36.4% of total government expenditure.
Country was moving towards debt trap.
Mounting “Adverse balance of payment(BOP)” Contd… : Contd… Fall in foreign exchange reserve.
Rise in prices.
Poor performance of public sector undertakings.
First Gulf war caused spikes in oil prices which caused a major balance-of –payment crisis for India.
India asked for $1.8 billion bailout loan from IMF, in return demanded reforms.
This New Economic Policy was inaugurated by former prime minister P.V. Narasimha Rao under the guidance his FM Manmohan Singh. Salient features of NEP-1991: : Salient features of NEP-1991: LIBERALIZATION : LIBERALIZATION Several types of controls on Indian economy(licensing, price control , financial control) This Led to corruption , undue delays & inefficiency NEP made a bid to reduce restrictions on economy (based on market economy) ECONOMIC REFORMS UNDER LIBERALIZATION : ECONOMIC REFORMS UNDER LIBERALIZATION . Tax reforms
Efforts to ensure VAT in all states. Foreign exchange reforms
Foreign trade policy reforms Abolition of licensing
De-reservation of production areas
Expansion of production quantity
Freedom to import capital goods Role of RBI shifted from “a regulator ” to “a facilitator”.
FII were allowed to invest in India
Domestic and international banks emerged. PRIVATIZATION : PRIVATIZATION Privatization is the general process of involving the private sector in the ownership or operations of a state owned enterprise. Privatization
outright sale of govt. Withdrawal of the govt.
enterprises ownership & mangt. from mixed enterprises
The ownership of PSUs is being gradually sold off to pvt. Entrepreneurs. privatization : privatization Losses due to privatization : Losses due to privatization GLOBALIZATION : GLOBALIZATION Process associated with increasing openness, growing economic interdependence and deepening economic integration in the world economy.
Unrestricted flow of goods and services, technology and expertise among different countries of the world. Positive impact of NEP : Positive impact of NEP Economic activities has picked up and the growth rate of GDP has shown an impressive increase.
Stimulated industrial production.
Significant increase in govt. revenues and subsequent decrease in fiscal deficit.
Greater flow of goods and services checked inflation rate.
Consumer’s sovereignty has widened.
substantial increase in forex reserves. Contd…. : Contd…. Flow of pvt. Foreign investment increased.
India has been recognized as emerging super power.
Monopoly markets has been converted into competitive market. Negative impacts of NEP : Negative impacts of NEP Agriculture is totally neglected.
Concentration of growth processes in urban area.
Might be results into Economic colonism.
Consumerism has been increased.
Lopsided growth process
Cultural erosion : Thanks