CHAPTER-III {New economic Reforms (LPG)}
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 expenditure and re