Economy Chapters

1. Economy and Economics2. Characteristics of Indian Economy3. Agriculture and Land Development4. National Income5. Planning6. Unemployment7. Trade and Commerce8. New Economic Policy9. Indian Financial System10. Indian Fiscal System11. Banking in India12. Tax System13. Industry14. Foreign Trade15. Glossary of Economic and Financial Terms16. Some Noteworthy Facts17. Socio Economic and Caste Census 2011

New Economic Policy

The New Economic Policy (NEP) introduced in 1991 marked a major shift in India’s economic strategy towards liberalization, privatization, and globalization.

Definition

The New Economic Policy refers to the reforms initiated in 1991 aimed at opening up the Indian economy by reducing government control, encouraging foreign investment, and promoting market-driven growth.

Key Features

  • Liberalization: Removal of many restrictions on industries and businesses.
  • Privatization: Reducing the role of the public sector and encouraging private sector participation.
  • Globalization: Opening up to foreign trade and investment.
  • De-licensing: Eliminating the need for licenses for many industries.
  • Reduction in import tariffs: Making India more competitive globally.
  • Financial Sector Reforms: Strengthening banking and financial institutions.

Impact of NEP

  • Accelerated economic growth and GDP increase.
  • Growth of private and foreign investments.
  • Expansion of the service sector, especially IT and telecom.
  • Improved balance of payments and foreign exchange reserves.
  • Creation of new job opportunities.
  • Challenges such as income inequality and regional disparities.

Previous Year Questions

  • SSC CGL 2020: What are the three pillars of the New Economic Policy?
  • Liberalization, Privatization, and Globalization.
  • HSSC 2021: In which year was the New Economic Policy introduced in India?
  • 1991.
  • RRB JE 2019: What is liberalization under NEP?
  • Removal of restrictions on industries and businesses.
  • SSC CHSL 2021: Define privatization in the context of NEP.
  • Reducing government control and encouraging private sector participation.
  • HSSC 2020: How did NEP impact foreign investment?
  • It encouraged foreign direct investment (FDI) by relaxing rules and opening markets.
  • SSC MTS 2020: Name one challenge faced due to NEP.
  • Income inequality.
  • RRB NTPC 2021: Mention a sector that grew significantly after NEP.
  • Information Technology (IT) sector.
  • SSC GD 2019: What does globalization in NEP mean?
  • Opening up the economy to international trade and investment.
  • HSSC 2019: How did NEP affect the public sector?
  • Reduced government control and promoted privatization.
  • SSC CGL 2021: What is de-licensing?
  • Eliminating the need for government licenses for many industries.
  • RRB JE 2020: What impact did NEP have on GDP growth?
  • It accelerated GDP growth.
  • SSC MTS 2019: What is the main objective of the New Economic Policy?
  • To promote economic growth by reducing government control and opening markets.
  • HSSC 2021: How did NEP improve India’s balance of payments?
  • By increasing foreign exchange reserves through exports and investments.
  • SSC CHSL 2020: Name a financial reform under NEP.
  • Strengthening banking and financial institutions.
  • RRB NTPC 2019: How did NEP affect employment?
  • Created new job opportunities, especially in private and service sectors.
  • SSC GD 2021: What was the role of import tariff reduction in NEP?
  • Made Indian products more competitive globally by lowering import duties.
  • HSSC 2020: Mention one sector negatively impacted by NEP.
  • Traditional industries facing stiff competition from imports.
  • SSC CGL 2019: Who was the finance minister when NEP was introduced?
  • Dr. Manmohan Singh.
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