In the year 1991, India faced a crisis in terms of foreign debts. The government was not in a position to pay its foreign debt. The foreign exchange reserves, normally maintained for the import of essential commodities like petroleum etc., were not enough to pay the required imports for fifteen days. This crisis was further intensified by the rise in prices of essential commodities. India approached the World Bank and the International Monetary Fund (IMF) and received a loan of $7 billion to face the crisis. These international organizations put certain conditions before India to get the loan. Like the government will liberalize, remove restrictions on the private sector and government intervention in many areas. It was also expected that restrictions on foreign trade between India and other countries would be removed. India accepted the conditions of the World Bank and IMF and announced the New Economic Policy (NEP).

The (NEP) New Economic policy consisted of wide ranging economic reforms which falls under the three heads of:

A. Globaliastion
B. Rural development
C. Privatisation
D. Liberalisation
E. Outsourcing

Choose the correct answer from the options given below:

A, C and D only

The correct answer is Option (4) → A, C and D only

The New Economic Policy (NEP) introduced by the Indian government in 1991 was aimed at making the Indian economy more market-oriented and expanding the role of private and foreign investment. The main components of the NEP fall under three primary heads:

1. Globalisation (A): This involved integrating the Indian economy with the global economy. Measures included reducing tariffs, removing import restrictions, and encouraging foreign direct investment (FDI). The objective was to make the Indian economy more competitive and to foster international trade and investment.

2. Privatisation (C): This entailed reducing the role of the public sector in the economy and encouraging private ownership. It involved selling government-owned enterprises to private entities and reducing the number of industries reserved for the public sector. The goal was to increase efficiency and productivity through private sector management.

3. Liberalisation (D): This included reducing government regulations and restrictions in the economy to encourage private enterprise. Policies under liberalisation aimed at removing licensing requirements for industries, deregulating markets, and reducing the control of the state over the economy. It also involved reforms in the financial sector to allow more freedom and competition.