Since independence, the year 1991 proved to be a milestone in India's economic history. Earlier, the country was in a severe economic crisis
It was passing and this crisis forced the policymakers of India to implement the new economic policy. Crisis arose
This situation prompted the government to formulate policies aimed at bringing price stabilization and structural reforms.
The policies were intended to correct weaknesses, thereby correcting the fiscal deficit and the inverse balance of payments. Structural reforms
Had removed the rigid rules, due to which reforms were also implemented in various sectors of the Indian economy and these policies
The result is that today India could also help a world-class institution like the International Monetary Fund.
Main objectives of the new economic policy of 1991
The main reason behind the inauguration of new economic policy by the then Union Finance Minister, Dr. Manmohan Singh in 1991
The objective is as follows.
I. Along with ushering the Indian economy into the arena of 'globalization', it had to be tailored to market trends.
II, bring down the rate of inflation and remove the payment imbalance.
III. Increase economic growth rate and create adequate foreign exchange reserves.
IV. Along with achieving economic stabilization, all kinds of unnecessary restrictions had to be shifted to a market-friendly economy.
V. Removal of restrictions was to allow the international flow of goods, services, capital, human resources, and technology.
VI. The involvement of private companies in all sectors of the economy was to be increased. That is why the number of areas reserved for the government has been reduced to 3.
At the beginning of mid-1991, the Government of India made some radical changes in its policies to make a trade, foreign investment, exchange rate, industry, fiscal system, etc. effective so as to speed up the edge of the economy.
The main objective of the new economic policy was to improve productivity and efficiency as well as to create a more competitive environment towards the economy. The rate of interest of all commercial banks under the same liberalization policy
Will be free to determine. They will not have any obligation to follow the rates of interest fixed by the Reserve Bank of India as provisions have also been made.