The New Economic Policy of India policy was introduced in 1991 by the P. V. Narasimha Rao government, which exposed the India Economy to the global world for the first time.
Also referred to as the LPG Model of growth, The New Economic Policy of 1991 has brought changes in various sectors of the Indian economy, mainly in trade and investment. The private sector began to play an important role with the deregulation and liberalization for foreign investment. Internal liberalization included relaxation of the industrial license regime, de-reservation of a number of sectors for private investments.
Before the liberalization, these activities were controlled by the State. With the liberalization, a period of economic growth was initiated through expanded investments including foreign investments, which led to the rise in foreign exchange reserves.
It is also believed that liberalized economy of India by generating new occupations have expanded employment opportunities. The expansion of service sectors is one of the boons of liberalization that has created great employment opportunities for educated workforce with the growth of new sectors.
The liberalized economy helps in removing restrictions in trade and business so that any country becomes free to do business anywhere.
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