What were the main reforms undertaken under the New Economic Policy of the early 1990s ?
- 1. Trade liberalization
- 2. Public Sector Disinvestment
- 3. Poverty Alleviation
- 4. Rapid industrialization
Select the answer using the code given below :
1 only
3 and 4
1 and 2
2 and 4
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Answer is Right!
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UPSC CAPF – 2024
The New Economic Policy (NEP) of the early 1990s, initiated in 1991, is characterized by liberalization, privatization, and globalization (LPG reforms). Statement 1, Trade liberalization, involved reducing restrictions on imports and exports, which is a core part of liberalization and globalization. Statement 2, Public Sector Disinvestment, involved selling off government stakes in Public Sector Undertakings (PSUs), which is a key aspect of privatization. Statements 1 and 2 were central to the structural reforms under the NEP. Statement 3, Poverty Alleviation, was a major goal of economic development and the government ran programs for it, but it was not a specific structural reform measure *of* the NEP itself, although it was hoped that growth spurred by NEP would help alleviate poverty. Statement 4, Rapid industrialization, was a desired outcome of the reforms aimed at improving efficiency and competitiveness, rather than being a specific reform step itself like dismantling licenses or opening up trade. Therefore, the main reforms were Trade liberalization and Public Sector Disinvestment.
The 1991 NEP marked a fundamental shift from a mixed economy with significant state control towards a more market-oriented system, dismantling the ‘License Raj’ and integrating India with the global economy.