What are the demerits of New Economic policy 1991?
What are the demerits of New Economic policy 1991?
The policy largely ignores small scale industries and agriculture sectors on which large population depend. Large dependence on foreign investment in several sectors of economy. The rate of Consumer Price Index (CPI) has increased over the years. Inadequate privatization due to strong resistance from labor unions.
What are the weaknesses of industrial development?
Shortcomings of Industrial Development in India
- (i) Disparity between Targets and Achievements:
- (ii) Misutilization of Capacity:
- (iii) Underperformance of Public Sector:
- (iv) Regional Imbalances:
- (v) Sick Industries:
- (vi) Tough Foreign Competition:
What were the major changes in industrial policy 1991?
The 1991 policy made ‘Licence, Permit and Quota Raj’ a thing of the past. It attempted to liberalise the economy by removing bureaucratic hurdles in industrial growth. Limited role of Public sector reduced the burden of the Government.
What are the advantages of 1991 industrial policy?
The main features of Industrial Policy 1991 were – (1) public sector de-reservation, (2) industrial licensing abolished, (3) disinvestment in the public sector, (4) allowing foreign capital investment, etc.
What was the main objective of new economic policy of 1991?
The main objectives to launch new economic policy (NEP) in 1991 are as follows: The main objective was to plunge Indian economy in to the field of ‘Globalization and to give it a new drive on market orientation. The new economic policy intended to reduce the rate of inflation and to remove imbalances in payment.
Who advocated new industrial policy in 1991?
Manmohan Singh knew that a framework on industrial reforms had already been prepared—he had served as a senior adviser to Shekhar, during which time Mohan had shown him a draft of the policy—and they were included in his six-week plan.
Which of the following is positive effect of industrial policy 1991?
The positive effect of the economic policy of 1991 was that licensing was abolished majorly for all the industries except for a few of them like coal, petroleum, sugar, chemicals etc. Thus as a result the corporate sector’s demand which remained ignorant for long was fulfilled.
Which system was abolished in the new industrial policy in 1991?
5. Abolition of MRTP Act: The New Industrial Policy of 1991 has abolished the Monopoly and Restricted Trade Practice Act. In 2010, the Competition Commission has emerged as the watchdog in monitoring competitive practices in the economy.
What was critical evaluation of new industrial policy 1991?
[CRITICAL EVALUATION OF NEW INDUSTRIAL POLICY 1991 CONT…..] INCREASE EFFICIENCY OF PUBLIC SECTOR: THE REDUCTION IN NUMBER OF INDUSTRIES RESERVED FOR PUBLIC SECTOR FROM 17 TO 3 AND THAT THREAT OF CLOSURE OF SICK PUBLIC SECTOR ENTERPRISES WOULD RESULT BIN RAISE IN THEIR EFFICIENCY.
What was the industrial licensing policy of 1991?
Under the industrial licensing policies, private sector firms have to secure licenses to start an industry. This has created long delays in the start up of industries. The industrial policy of 1991 has almost abandoned the industrial licensing system.
What was the impact of the new industrial policy?
The new industrial policy increased private sector participation and all other sectors were opened for them. The government abolished the phased manufacturing programs and devalued currency to increase the foreign direct investment. The government liberalised the local content requirement for the indigenous industries.
What was the impact of new economic policy of 1991?
This policy opened the door of the India Economy for the global exposure for the first time. In this New Economic Policy P. V. Narasimha Rao government reduced the import duties, opened reserved sector for the private players, devalued the Indian currency to increase the export. This is also known as the LPG Model of growth. Hemant Singh