Critically examine the outcomes of the New Industrial Policy 1991.

Outcomes of Industrial policy 1991

• Industrial policy 1991 ended the license raj and quota raj.
• The 1991 policy attempted to liberalize the economy by removing bureaucratic hurdles in industrial growth.
• The role of public sector became limited. Only 2 sectors were finally left reserved for public sector. The process of disinvestment in PSUs also started.This further reduced the burden on the government
• Easier entry of multinational companies, privatization, removal of asset limit on MRTP companies, liberal licensing and dismantling of price controls were some of its key features.

Thus, we can see that Industrial policy 1991 resulted in increased competition, that led to lower prices in many goods and services. This brought domestic as well as foreign investment in almost every sector opened to private sector.

Topics: GS-III: Changes in Industrial Policy and Their Effects On Industrial Growth