Economic Reforms Since 1991 test - 1

Liberalised Industrial Policy was introduced in 1991 in India. Because before that all the industries needed licensing and permission from government to commence their business, this resulted in depletion of Entrepreneurial spirit. Hence resulted in Backwardness of Indian Industry

MRTP is abbreviation of Monopolies and Restrictive Trade Practices Act, it was first launched in 1970. The act was launched to minimise control in few hands, the act made sure that giant business houses did not misuse their powers.

Capitalist economy is the economy controlled by free play of market forces. Under such economics structure the sole focus of the producer is to earn maximum benefit. Social welfare is not awarded any concern, the only motive of such economy is maximum benefit or profit earning.'

Socialist economy means the system under which economic system is controlled and regulated by the government so as to ensure welfare and equal opportunity to the people in a society. It refers to the government ownership of the means of production, planning and income distribution by the government.

Self reliance means that an economy is not totally dependent on imports and is able to meet its requirements through domestic production.

Economic growth is the increase in the value of the goods and services produced by an economy over time. It is conventionally measured as the percentage rate of increase in real Gross Domestic Product, or real GDP (GDP adjusted for inflation).

The license, quota, permit raj was the elaborate system of licences, regulations and accompanying red tape that were required to set up and run businesses in India between 1947 and 1990. The New Economic Policy (NEP) aimed at replacing LQP raj by liberalisation, privatisation and globalisation (LPG) policies.

After 1991, India's trade policy was to encourage exports and removal of government control on imports. An important element of the changes in India's trade policy was the removal of quantitative restriction on imports under which 715 items were freed of quantitative restrictions.

The measures taken under New Economic Policy (NEP) are called economic reforms as these policies sought to reform the Indian economy and remove the rigidities that had entered into the various segments of the economy.

NEP, also known as the New Economic Policy was the new plan of action, initiated in 1991 by the then Union Finance minister, Dr. Manmohan Singh. It consisted of wide ranging economic reforms which changed the direction of our developmental strategies.