The main features of the new economic reforms/policy are stated below:
1. Liberalisation:
A new company can now be floated with new issue of shares, debentures etc. In case the entrepreneurs require imported equipment, they are no longer required to approach the central authority for foreign exchange. The area of liberalization is (i) licensing business, (it) Foreign Investment (iii) Foreign Technology (iv) Estabxadlishment, Merger, Amalgamation and taken over, and (v) Simple Exit policies.
2. Extension of Privatization:
The field of privatization has further been extended by offering greater opportunities of investment to the foreign private investors. Economic Policy seeks to accord priority role to the private sector.
3. Globalization of Economy:
It means unification of the domestic economy with the world, economy. In fact, this has become possible by various policy initiatives taken by the Govt. For instance, devaluation of rupee in June 1991 was intended to do away with the artificially controlled overvalued exchange rate of the rupee.
4. Market Friendly State:
The role of the state is one that is confined to selected non-market areas and is largely to ensure a smooth functioning of the market economy.
As compared to past, the ownership of some selected enterprises has been transferred to private sector. Its activities as owner of resources have been confined to two types of activities.
5. Modernization:
New economic Policy accorded high priority to modern techniques. It aims at to augment the growth rate of sunrise industries. In order to import technical dynamics to Indian industry, the Govt, decided to clear all foreign collaborations. Private entrepreneurs will be free to settle the terms of such collaborations on their own behalf.
6. New Public Sector Policy:
Public sector attracted priority. In the words of Dr. Manmohan Singh, Finance Minister in Congress Govt. that this priority was given to the public enterprises in the hope that it will help to accumulate capital, industrialization, economic growth and removal of ***.
But none of these objectives were achieved. Thus, new economic reforms are trying to shift the emphasis from public to the private sector.
