state the strategies under new economic policy
Answers
The New Economic Policy (NEP, Russian новая экономическая политика, НЭП) was an economic policy of Soviet Russia proposed by Vladimir Lenin, who described it as a progression towards "state capitalism" within the workers' state of the USSR.[1]Lenin characterized "state capitalism" and his NEP policies in 1922 as an economic system that would include "a free market and capitalism, both subject to state control" while socialized state enterprises were to operate on "a profit basis".[2]
The NEP represented a more market-oriented economic policy, deemed necessary after the Russian Civil War of 1918 to 1922, to foster the economy of the country, which was almost ruined. The complete nationalization of industry, established during the period of War Communism, was partially revoked and a system of mixed economy was introduced, which allowed private individuals to own small enterprises,[3] while the state continued to control banks, foreign trade, and large industries.[4] In addition, the NEP abolished prodrazvyorstka (forced grain requisition)[3] and introduced prodnalog: a tax on farmers, payable in the form of raw agricultural product.[5] The Bolshevik government adopted the NEP in the course of the 10th Congress of the All-Russian Communist Party(March 1921) and promulgated it by a decree on 21 March 1921 "On the Replacement of Prodrazvyorstka by Prodnalog". Further decrees refined the policy.
Other policies included the monetary reform (1922–1924) and the attraction of foreign capital.
The NEP policy created a new category of people called NEPmen (нэпманы), nouveau riches due to NEP.
Joseph Stalin abolished the New Economic Policy in 1928.
The laws sanctioned the co-existence of private and public sectors, which were incorporated in the NEP, which on the other hand was a state oriented "mixed economy".[12]
The NEP represented a move away from full nationalization of certain parts of industries. Some kinds of foreign investments were expected by the Soviet Union under the NEP, in order to fund industrial and developmental projects with foreign exchange or technology requirements.[13]
The NEP was primarily a new agricultural policy.[14] The Bolsheviks viewed traditional village life as conservative and backward. It was reminiscent of the Tsarist Russia that had supposedly been overthrown by the October Revolution. With the NEP, the state only allowed private landholdings because the idea of collectivized farming had met strong opposition.[15]
Lenin understood that economic conditions were dire, so he opened up markets to a greater degree of free trade, hoping to motivate the population to increase production. Under the NEP, not only were “private property, private enterprise, and private profit largely restored in Lenin’s Russia,” but Lenin’s regime turned to international capitalism for assistance, willing to provide “generous concessions to foreign capitalism.”[16] Lenin took the position that in order to achieve socialism, he had to create “the missing material prerequisites” of modernization and industrial development that made it imperative for Soviet Russia to “fall back on a centrally supervised market-influenced program of state capitalism”.[17] Lenin was following Karl Marx’s precepts that a nation must first reach “full maturation of capitalism as the precondition for socialist realization.”[18] The main policy Lenin used was an end to grain requisitions and instead instituted a tax on the peasants, thereby allowing them to keep and trade part of their produce. At first, this tax was paid in kind, but as the currency became more stable in 1924, it was changed to a cash payment.[3] This increased the peasants' incentive to produce, and in response production jumped by 40% after the drought and famine of 1921–22.[19]
NEP economic reforms aimed to take a step back from central planning and allow the economy to become more independent. NEP labor reforms tied labor to productivity, incentivizing the reduction of costs and the redoubled efforts of labor. Labor unions became independent civic organizations.[citation needed] NEP reforms also opened up government positions to the most qualified workers. The NEP gave opportunities for the government to use engineers, specialists, and intelligentsia for cost accounting, equipment purchasing, efficiency procedures, railway construction, and industrial administration. A new class of "NEPmen" thrived. These private traders opened up urban firms hiring up to 20 workers. NEPmen also included rural artisan craftsmen selling their wares on the private market.[20]
we detail about the seven important features of new economic policies under economic reforms, i.e.,
(1) Liberalisation,
(2) Privatisation,
(3) Globalisation of the Economy,
(4) New Public Sector Policy,
(5) Modernisation,
(6) Financial Reforms,
(7) Fiscal Reforms.