The beginning of a new era in India’s economic policy- the new economic policy of 1991
9 May 2021
The push of the NEP has been towards establishing a more serious space in the economy to improve the profitability and effectiveness of the framework. This was to be accomplished by eliminating the hindrances to entry and restrictions on the growth of firms. The system of reforms presented in India in July 1991 introduced a blend of macroeconomic stabilization and structural alteration. Various short- and long-term targets guided it. Stabilization was important in the short run to re-establish the balance of payments and to control inflation. Simultaneously, changing the structure of establishments themselves through reforms was similarly significant from a long-term perspective.
The new government moved quickly to implement a program of macroeconomic stabilization through financial rectification. Other than this, structural reforms were started in the field of trade, industry, and the public sector.