Introduction. After Independence India took to planning so that rapid industrialisation and development could be achieved. Till 1991 India remained a highly controlled, centralised and closed economy. However, it was realised that the policy could not deliver the goods to the public and development and happiness of the people remained a cherished goal only.
Benefits. In the nineties (908) a number of favourable and desirable things happened. The new economic policy led to increased growth rate, ensuring the availability of high quality goods and generation of competitive element among Indian entrepreneurs. The free flow of goods resulted into high rate of growth of exports. The new policy has also led to modernisation and arrival of new technology without any pre-conditions.
Drawbacks. However, the new economic policy has adversely affected several areas and the policy has been questioned on several counts. Multinationals took over Indian firms and small firms were forced to close down their operations. It is also undermining the bargaining power of Indian firms in negotiating acceptable terms is joint ventures with foreign firms.
Conclusion. All this implies that a developing country cannot entirely depend on a market economy to improve the economic well-being of the people. The new economic policy is considered to be a mixed blessing; its gains cannot be undermined and its negative impact cannot be ignored.
