1. I) Meaning of Economic Reforms (New Economic Policy)
1.1. It refers to a set of economic policies directed to accelerate the pace of 'growth and development'.
1.2. Three broad components of new economic policies are:-
1.2.1. [L] Liberalisation
1.2.2. [P] Privatisation
1.2.3. [G] Globalisation
1.3. The Economic Reforms introduced in 1991 can broadly be classified into:-
1.3.1. Stabilisation Measures
1.3.1.1. Short-term measures aimed at correcting the deficit in balance of payments and controlling inflation.
1.3.2. Structural Reforms
1.3.2.1. Long-term measures aim at improving the level of efficiency in the economy by increasing competitiveness and reducing rigidities in various sectors of Indian Economy.
2. II) Elements of New Economic Policy (NEP 1991)
2.1. ★ Liberalisation
2.1.1. Liberalisation of the economy means freedom of the producing units from direct or physical control of the government.
2.1.2. Economic reforms under Liberalisation
2.1.2.1. I) Industrious Sector Reform
2.1.2.2. II) Financial Sector Reforms
2.1.2.3. III) Tax Reforms
2.1.2.4. IV) Foreign Exchange Reforms
2.1.2.5. V) Trade and Investment Policy Reforms
2.2. ★ Privatisation
2.2.1. Privatisation refers to giving loan to greater roles to put sector reducing work to Public Sector
2.2.2. It may happen in two ways:-
2.2.2.1. 1) Outright sale of government enterprises to the private entrepreneurs or selling shares to private sector disinvestment
2.2.2.2. 2) Withdrawal of the government ownership and management from the mix enterprises (the enterprises jointly own and manage by the government and the private entrepreneurs).
2.3. ★ Globalisation
2.3.1. Globalisation means integrating the economy of a country with the economies of other countries under conditions of free flow of trade and capital across borders.