What are the Achievements of New Economic Policy of India?



1. Increase in National Product:

Before the inception of new economic policy, the growth rate in real national income was 4.7%. On the enforcement of new economic policy, growth rate reduced to 0.6 percent. In 1993-94, growth rate rose to 5.0 percent at 1993-94 prices and in 1996-97 it rose to 8.2 percent. However, in 2000-01 growth rate was witnessed to be 6.2 percent.

2. Imports:

In the wake of new economic policy, growth rate of imports witnessed wide fluctuations. In 1991-92 growth rates of imports declined to 11% against 22% in 1990-91. But, in the following year i.e. 1992-93, it jumped to 32.4% thereafter fell to 15% in 1993-94. However, in the fiscal year of 2001-02, growth rate of imports was witnessed to be 14.5%.

3. Fiscal Deficit:

The main thrust of new economic policy is to bring down fiscal deficit to the extent of 3 percent of GDP. In 1991-92, fiscal deficit came down to 5.9% and further to 5.2% in 1992-93.

No doubt, after the launching of economic policy fiscal deficit has reduced but still Govt, is far away from its target. As in 1995-96, fiscal deficit rose to 7.9% against the target of 4.7%. Moreover, it again moved to 6.4% in 2000-01.

4. Foreign Currency Reserves:

New economic reforms have favourable impact on foreign currency reserves which had fallen to the extent of Rs. 6,251 crore in 1989-90.

But, thanks to new economic reforms that foreign exchange reserves have increased to Rs. 58,446 crore in 1995-96 and 1, 97,204 crore in 2000-01.

5. Agricultural Production:

Agricultural production has also been favourably affected by new economic reforms. Before, the implementation of new economic reforms, growth rate of agricultural production was 3%.

But, in 1991-92, growth rate got down to 1.9%. In other words, we can say that within the two consecutive years mentioned above growth rate witnessed a downward trend of 4.5%. In 1992-93, growth rate of agricultural production increased to 6.6% and 6.3% in 2000-01.

6. Foreign Investment:

Liberal approach to new economic policy has gradually given rise to foreign capital investment. In 1990, proposals involving Rs. 8123 crore worth of direct foreign investment were sanctioned by the Govt. Proposals worth Rs. 12163 crore, and Rs. 20319 crore of foreign direct investment were sanctioned in the consecutive years of 1995-96 and 2000-01 respectively.