Critical Review of New Economic Policy on Indian Economy

Abstract

India opened up the economy in the early nineties following a major crisis that led bya foreign exchange crunch that dragged the economy close to defaulting on loans. The countryran out of foreign exchange reserves. To face the crisis situation, the government decided tobring about major economic reforms to revive Indian economy. This paper studies the Impact ofNew Economic Policy on Indian economy. The Economic Reforms that made by government byNew Economic Policy in 1991 made significant impact on the Indian Economy. The reforms didaway with the License Raj, reduced tariffs and interest rates and ended many public monopolies,allowing automatic approval of foreign direct investment in many sectors. The primary objectiveof this model was to make the economy of India the fastest developing economy in the globewith capabilities that help it match up with the biggest economies of the world.