At the time of independence, Indian economy was an agrarian economy and characterised as underdeveloped. The year 1991 marked as a watershed in the process of growth of the Indian economy, due to the adoption of new economic policy. The new economic policy is comprised of three main policies:
Liberalisation is the policy of granting freedom to enterprises from government control. Existing license Raj established the irresponsible, self-perpetuating bureaucracy and corruption that hampered the economy’s growth. Social and economic infrastructures were in poor condition and becoming an obstacle. A number of public sector emerged and State-owned enterprises were making huge losses. Thus, these factors arouse the need for liberalisation.
The main features of liberlisation are:
Relaxation on control of monopoly
Liberlised industrial policy
Removal of restrictions
Liberlisation in capital market
Development of infrastructure
The significance of liberlisation is felt in overcoming the problem of ‘Control Raj’, in providing more freedom to entrepreneurs, in generating the spirit of competition in the economic system and encouraged entrepreneurs to make investment, etc.
The changes in the Indian economy after adoption of liberlisation policy are:
Increase in national income
Improvement in the industrial sector
Changing composition of national income
Improvement in saving and investment performance
Increase in foreign exchange reserve
Role of public sector in the economy has increased, etc.
To Access the full content, Please Purchase