Q.Write a short note on New Economic Policy.

The New Economic Policy of 1991 introduced LPG reforms to pull India out of an economic crisis by reducing government controls and opening the economy.

By 1991, India faced a serious economic crisis — a large fiscal deficit, very low foreign exchange reserves, high inflation and a balance-of-payments problem. To recover, the Government of India announced the New Economic Policy (NEP) in July 1991.

Main features of the NEP:

1. Liberalisation — removing or relaxing government controls such as industrial licensing, so that businesses could operate more freely.
2. Privatisation — reducing the role of the public sector and giving a greater role to private enterprise, including disinvestment in public sector units.
3. Globalisation — integrating the Indian economy with the world economy by encouraging foreign trade and investment and reducing tariffs. …