Salient Features of Economic Reforms
- Liberalisation. The thrust of the policy is the freedom for the entrepreneur to enter any industry/trade/business. The approvals for any venture are almost automatic. The various relaxations allowed in the new economic policy enables the entrepreneurs to make their decisions.The regimes of control have been removed and the economic operations have been liberalised on all counts. That is why it is termed as policy of Economic Liberalisation.
- Globalisation of the Economy The new economic policy has the stress on globalising the Indian economy. Globalisation means the unification or integration of the domestic economy with the rest of the world.
- Market Friendly State. Under this new policy the role of the state is largely to ensure a smooth functioning of the market economy. Controlled economy has now largely been replaced by a free economy.
Benefits of the New Policy
New Economic Policy will be beneficial to the economy in several ways. Such as
(i) It will improve the efficiency in the use of resources.
(ii) The growth rate of the economy is also expected to go up.
Shortcomings of the New Policy
Main shortcomings are as under.
(i) It does not contain any institutional arrangement to ensure a proper functioning of the new system.
(ii) It suffers from inadequate and wrong perception of the totality.
(iii) It overlooks the demand side.
(iv) It is also feared that if proper safeguards were not taken, if may further widen the gap between the rich and the poor. Besides this, it may also increase our dependence on foreign MNCs and international financial institutions like IMF and World Bank.
Hence, the success of this new policy depends on our indigenous efforts in the right direction.