Paper Details

Name: Harpreet Kaur
Country: India

Year: 2023
Volume: Volume-10, Issue-1 (January-June)
Page Number: 1-5

Due to financial crisis in the late 1980s, India had to approach the International Bank for Reconstruction
and Development (IBRD), popularly known as World Bank and the International Monetary Fund (IMF)
to meet its import requirements especially oil and essential consumption commodities. India received a
conditional loan of $7 billion to manage its balance of payment crisis. For availing the loan, these
international agencies expected India to liberalize and open up the economy by removing restrictions
on the private sector, reduce the role of the government in pivotal areas and remove trade restrictions
between India and other countries. India agreed to the conditions imposed by World Bank and IMF and
announced the New Economic Policy (NEP). The New Economic Policy was an attempt to alter the
basic parameters of economic policies since Independence and to restructure the economy drastically.
All the above factors led the government to introduce a new set of policy measures which changed the
direction of our developmental strategies. The landmark change brought about by the Industrial Policy
of 1991 in Indian economy was entirely a new chapter which enforced a total open economic system as
compared to the earlier mixed system.