Policies of Economy & their Impact

1. NEWPOLICIES ITS IMPACTON INDIANECONOMY
NIP(LPG)
By:- Laxman Bhadane.
In Guidance of Prof.Dipali Patil

2. NEW ECONOMIC POLICY ,1991

3. NEW ECONOMIC POLICY(1991)-
LIBERALIZATION ,PRIVATIZATION AND
GLOBALIZATION (LPG)
LPG phenomenon was first initiated in the Indian Economy
in 1991 by the union finance minister Dr. Manmohan
singh
 There was decline in the country’s
 export earnings
 national income
 industrial output.
That is when the government decided to introduce the New
Industrial Policy (NIP) in 1991 to start liberalizing the
Indian economy

4. NEED FOR LPG
 Initiate rapid economic growth to raise the standard
of living, reduce the widespread un. Become self-
reliant and set up a strong industrial base with
emphasis on heavy and basic industries;
 Achieve balanced regional development by
establishing industries across the country;
 Reduce inequalities of income and wealth;
 . Adopt a socialist pattern of development — based
on equality and prevent exploitation of man by man.
 employment and poverty stalking the land;

5. THE MAJOR OBJECTIVE OF THE NEW
ECONOMIC POLICY
 1. Utilizing fully the indigenous capabilities of entrepreneurs.
 2. Fostering research and development efforts for the
development of indigenous technologies.
 3. Raising investments.
 4. Removing regulator system and other weaknesses.
 5. Improvement in efficiency and productivity.
 6. Controlling monopolistic power.
 7. Assigning the right areas for the public sector undertakings.
 8. Ensuring welfare as also skills and facilities to the workers
to enable them to face new technologies.
 9. Retaining the capacity to earn our own foreign exchange
through exports.
 10. To achieve self-reliance

6. LIBERALIZATION
Liberalization means elimination of state control over
economic activities
It is commonly known as free trade. It implies removal
of restrictions and barriers to free trade.
Liberalization refers to freedom to business enterprises
from excessive government control and they are given
freedom to make their own decisions regarding
production, consumption, pricing, marketing,
borrowing, lending & investments.

8. PRIVATIZATION
The transfer of ownership, property or business from
the government to the private sector is termed
privatization
. The government ceases to be the owner of the entity
or business

9. FEATURES OFPRIVATIZATION
 Decentralization the transfer of the ownership of
productive assets to the private sector.
 Entry of private sector industries into the areas
exclusive reserved for the state sector or which are
considered exclusive monopolies of state.
 Limiting the scope of the public sector or no more
diversification of existing public sector
understandings.

10. GLOBALIZATION
Globalization means integration of the national economy
with the world economy. It implies
 free flow of information,
 ideas, technology,
 goods and services,
 capital and even people across different countries and
societies.
It increases connectivity between different markets in the
form of trade, investments and cultural exchanges

11. POSITIVE IMPACT OF LPG ON INDIAN
ECONOMY
1) Increase in GDP growth rate
1990-1991- 1.1%
2014-2015 - 7.26%
2015-2016- 7.5%
(Source -http://statisticstimes.com/economy/gdp-of-india.php)
Because of the Abolition of Industrial licensing,
privatization, advanced foreign technology and
Reduction of taxes India’s GDP is increased after
1991 reforms

12. 2 INCREASE IN FOREIGN DIRECT INVESTMENT
(FDI)
 1991 FDI inflow was 408 crores
 FDI inflow in India was 106,693 Crores in 2015
 India has allowed 100% FDI in medical services,
Telecom sector, and single brand retail Etc.
 .FDI cap increased in insurance & sub-activities
from 26% to 49%
 In Private Banking- Except branches or wholly
owned subsidiaries (74%)
 FDI is allowed and in Public sector banking 20%

13. 3) INCREASE IN PER CAPITA INCOME-
Per capita income or average income measures the average income
earned per person in a given area (city, region, country, etc.). It is
calculated by dividing the area's total income by its total population
.
Year
1991
2015
Per Capita Income
Rs.11535
Rs. 88,533
Per Capita income is increased due to Increase in Employment, due to
new economy policy of globalization and privatization many job
opportunities are created so, people’s income was increased.

14. INCREASE IN MERGERS AND JOINT VENTURES AFTER
NEW ECONOMIC POLICY,1991

15. Thank You