Question

briefly assess the impact of new economic policy on Indian economy​

Answer 1

Answer:

New Economic Policy refers to economic liberalisation or relaxation in the import tariffs, deregulation of markets or opening the markets for private and foreign players, and reduction of taxes to expand the economic wings of the country.

Explanation:

hope you appreciate this ans

Answer 2

Answer:

Economic policy:

Economic policy refers to the actions that

governments take in the economic field. It covers the

systems for setting levels of taxation, government

budgets, the money supply and interest rates as well

as the labor market, national ownership, and many

other areas of government interventions into the

economy. Pre-1991 economic scenario in India:

● Indian economic policy after independence was influenced by the colonial experience

(which was seen by Indian leaders as exploitative in nature) and by those leaders'

exposure to Fabian socialism.

● Nehru, and other leaders of the independent India, sought an alternative to the

extreme variations of capitalism and socialism.

● In this system, India would be a socialist society with a strong public sector but also

with private property and democracy.

● As part of it, India adopted a centralised planning approach.

● Policy tended towards protectionism, with a strong emphasis on import substitution,

industrialisation under state monitoring, state intervention at the micro level in all

businesses especially in labour and financial markets, a large public sector, business

regulation. Drawbacks of Pre-1991 economic policy:

1.Licence raj:

The “Licence Raj” or “Permit Raj” was the elaborate system of licences, regulations and

accompanying red tape that were required to set up and run businesses in India between

1947 and 1990.

2.Import substitution:

Import substitution industrialization (ISI) is a trade and economic policy which

advocates replacing foreign imports with domestic production. ISI is based on the premise

that a country should attempt to reduce its foreign dependency through the local production

of industrialized products and was intended to promote self reliance. But this meant the

monopoly of indian industries and lack of incentive for them to improve the quality of

products which hampered consumer interests.

“Before the process of reform began in 1991, the government attempted to close the Indian

economy to the outside world. The Indian currency, the rupee, was inconvertible and high tariffs and

import licensing prevented foreign goods reaching the market.The labyrinthine bureaucracy often led to

absurd restrictions—up to 80 agencies had to be satisfied before a firm could be granted a licence to

produce and the state would decide what was produced, how much, at what price and what sources of

capital were used