ques 7&8
Dear Student
The New Economic Policy was adopted in the year 1991 . Since the time of independence Indian leaders had followed an inward oriented trade restrictive policy for the Indian economy . They thought that if India became self sufficient then she will develop faster . Reliance on external trade was not encouraged . But this inward oriented policies of import substitution and import restrictions led to fall of quality of Indian goods . Manufacturers knew that their competition with foreign markets was not existent . Hence they had no intentions of raising the quality of their products . Also the license raj was another problem cropping up . License fetching was becoming more important than production . So the New Economic Policy was adopted . Outward oriented measures were taken up . Trade restrictions were lessened . Like the tariff rate on imports were lowered so as to encourage foreign trade . Liberalization was the main aim of the policy . Infrastructure was developed to attract FDI (foreign direct investments ) . Abolition of restrictive trade pratices also included freedom to import capital goods . The investment limits of small scale industries were hiked . Globalization and economic stability were the two main goals of this policy .
Regards .
The New Economic Policy was adopted in the year 1991 . Since the time of independence Indian leaders had followed an inward oriented trade restrictive policy for the Indian economy . They thought that if India became self sufficient then she will develop faster . Reliance on external trade was not encouraged . But this inward oriented policies of import substitution and import restrictions led to fall of quality of Indian goods . Manufacturers knew that their competition with foreign markets was not existent . Hence they had no intentions of raising the quality of their products . Also the license raj was another problem cropping up . License fetching was becoming more important than production . So the New Economic Policy was adopted . Outward oriented measures were taken up . Trade restrictions were lessened . Like the tariff rate on imports were lowered so as to encourage foreign trade . Liberalization was the main aim of the policy . Infrastructure was developed to attract FDI (foreign direct investments ) . Abolition of restrictive trade pratices also included freedom to import capital goods . The investment limits of small scale industries were hiked . Globalization and economic stability were the two main goals of this policy .
Regards .