Indian Economy & Macroeconomics (Class-XII)

CHAPTER -3 NEW ECONOMIC REFORMS MEANING OF ECONOMIC REFORMS  (OR)  NEW ECONOMIC POLICY(NEP)  : The new economic policy started by the government since 1991 in order solve the Economic crisis and to accelerate the rate of economic growth is called Economic Reforms. It is also known as new economic policy which consists of Liberalization, Privatization and Globalization (LPG). This aims at the rendering the economy more efficient, competitive and developed . NEED FOR ECONOMIC REFORMS / RESONS WHY ECONOMIC REFORMS WERE INTRODUCED: 1. Mounting fiscal deficit: Fiscal deficit of the government had been mounting year after year on continuous increase in non-development expenditure. Due to persistent rise in fiscal deficit there was corresponding rise in public debt and interest payment liability there was possibility that the economy might lead to debt-trap situation. Thus it becomes essential for the government to reduce its non development  ...

  Comparative D evelopment Experience of India and its Neighbours   Development Path of India, Pakistan and China. (i) All the three countries started their development path at the same time. India and Pakistan got independence in 1947 and People ’s Republic of China was established in 1949. (ii) All the three countries had started planning their development strategies in similar ways. India announced its First Five Year Plan in 1951, Pakistan announced in 1956 and China in 1953. (iii) India and Pakistan adopted similar strategies, such as creating a large public sector and raising public expenditure on social development. (iv) Both India and Pakistan had adopted ‘mixed economy’ model but China had adopted ‘Command Economy’ model of economic growth. (v) Till 1980 s , all the three countries had similar growth rates and per capita incomes. (vi) Economic Reforms were implemented in China in 1978, in Pakistan in 1988 and in India in 1991. Development Strategy: A. ...