short notes on an assessment of new economic policy?
Answers
Answered by
3
New economic policy refers to economic reforms in 1991 on the advice of the World bank to improve the balance of payment and to bring inflation under control. LPG or Liberalization, Privatisation, and Globalisation were implemented followed several other reforms till now. Liberalization aimed at abolishing industrial licensing in many industries, private and foreign banks were permitted to establish their branches, foreign investments were allowed, export duties removed etc.
Privatization included disinvestment in public sector and entry of private sector.
Globalization was the outcome of the other two policies.
LPG was a U-turn policy for the economy of India. 21s century India has seen more than 20% growth in its GDP since economic reform. However, growth in agricultural and industrial sectors declined, the service sector has seen continuous growth since then. Foreign investments have multiplied rapidly. But there are many scholars who are on the idea that economic reforms are yet unsuccessful in key areas like employment, agriculture, infrastructure development.
Agricultural sectors have experienced a reduction in import duties but it has seen a downward trend in growth, more focus on export production rather than domestic production, increased global competition.
The industrial sector has also suffered a lot due to increased imports and competition to local manufacturers, inadequate investment in infrastructure.
Disinvestments in PSUs have seen negative reviews because it is believed that government assets were undervalued and the proceeds are used mainly to write off losses instead of putting in development policies.
Though rates of direct taxes have seen a reduction, yet India is struggling with tax evasion problem. Power sector saw a huge hike in electricity prices and Siricilla tragedy is one sad outcome of it.
LPG reforms brought positive as well as negative changes. The growth is continuous in some areas and still, every section of society has not benefitted from it. Unemployment, poverty, inequality prevails till now.
Privatization included disinvestment in public sector and entry of private sector.
Globalization was the outcome of the other two policies.
LPG was a U-turn policy for the economy of India. 21s century India has seen more than 20% growth in its GDP since economic reform. However, growth in agricultural and industrial sectors declined, the service sector has seen continuous growth since then. Foreign investments have multiplied rapidly. But there are many scholars who are on the idea that economic reforms are yet unsuccessful in key areas like employment, agriculture, infrastructure development.
Agricultural sectors have experienced a reduction in import duties but it has seen a downward trend in growth, more focus on export production rather than domestic production, increased global competition.
The industrial sector has also suffered a lot due to increased imports and competition to local manufacturers, inadequate investment in infrastructure.
Disinvestments in PSUs have seen negative reviews because it is believed that government assets were undervalued and the proceeds are used mainly to write off losses instead of putting in development policies.
Though rates of direct taxes have seen a reduction, yet India is struggling with tax evasion problem. Power sector saw a huge hike in electricity prices and Siricilla tragedy is one sad outcome of it.
LPG reforms brought positive as well as negative changes. The growth is continuous in some areas and still, every section of society has not benefitted from it. Unemployment, poverty, inequality prevails till now.
Similar questions