List the Major Achievements and Weakness of New Economic Policy 1991.

Kane Dane

The Major Achievements of New Economic Policy are:

GDP Growth: GDP rose from 0.8 percent in 1991-92 to 7 percent for the period from 1994-95 to 1996-97.
Increase in Gross rate of return (ROR) on Capital: In 1995-96, the gross rate of return was recorded at a high of 16.1 percent.
Decline in inflationary trend of Wholesale Price Index (WPI): The WPI declined to 4.6 percent in 1995-96 from 13.7 percent level in 1991-92 (at 1981-82 prices).
Rise in foreign reserves: The foreign exchange reserves increased to US. $ 25.4 billion (July 4, 1997) from US $ 2.24 billion in 1990-91.
Improvement in Index of Industrial Production: The industrial production index rose to 11.8 percent, in 1995-96 from merely 0.6 percent in 1991-92.
Export growth: Exports rose to 20.8 percent in 1995-96 from 3.8 percent in 1992-93 (in US Dollars).

Some of the major weaknesses of New Economic Policy are:

The New Economic Policy concentrates mainly on large corporate sector. The policy largely ignores small scale industries and agriculture sectors on which large population depend.
Large dependence on foreign investment in several sectors of economy.
The rate of Consumer Price Index (CPI) has increased over the years.
Inadequate privatization due to strong resistance from labor unions.
Government has disinvestment mostly in healthy industrial units and mote so to reduce the fiscal deficit, which is unjustifiable.
The implementation of new economic policy has not helped in reducing fiscal deficit. Non-plan expenditures have been not reduced.