Question

What came to be known as India’s new economic policy? How was this policy strengthened?

Answer 1

With the downgrading of India’s credit rating by some international agencies, there was a heavy flight of capital out of India. The Government has to mortgage 40 tons of gold to the Bank of England. Under these circumstances, the Government for 1991-92 presented its budget in July 1991 with a series of policy changes that underlined globalization, liberalization, and privatization. This has come to be called India’s new economic policy.