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NEP Introduction- 1991 – Reform – LPG – P. M. – F. M.

NEP Introduction- 1991 – Reform – LPG – P. M. – F. M. Pre Reform Features Mixed System, Closed Economy. Restriction Policies – Industry, banking, licensing. Public Sector – Dominant - inefficiency. Complicated tax system. No free trade. High fiscal deficits. Imbalance of BOP.

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NEP Introduction- 1991 – Reform – LPG – P. M. – F. M.

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  1. NEP Introduction- 1991 – Reform – LPG – P. M. – F. M.

  2. Pre Reform Features • Mixed System, Closed Economy. • Restriction Policies – Industry, banking, • licensing. • Public Sector – Dominant - inefficiency. • Complicated tax system. • No free trade. • High fiscal deficits. • Imbalance of BOP.

  3. Why NEP? • Fiscal Deficit – Gap between Income & Exp. – Loan • Fiscal Imbalance- • Internal Debt of Central Gov. [GDP] • 1980-81 – 33.3% • 1990-91 – 49.7% • Debt. Trap. • BOP situation –

  4. Inflation – • YearRate of Inflation • 1980-81 6 – 7% • 1990-91 10 & above]

  5. Structural Reforms Improve the supply side of the economy Measures – Industrial Reforms Public Sector Reform & Disinvestment Trade & Capital Flows Reforms Financial Sector Reforms A. Banking Sector Reforms B. Capital Market Reforms C. Insurance Sector Reforms

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