Previous Year Question
The New Economic Policy is commonly also known as the ______ model of development.
Correct Answer: C
Detailed Solution
India's New Economic Policy of 1991 is commonly known
as the LPG Model. Here, LPG stands for:
L — Liberalisation
P — Privatisation
G — Globalisation
Economics material published by NIOS, under the Government of India, explicitly identifies the New Economic Policy introduced in 1991 as the Liberalisation, Privatisation and Globalisation (LPG) Model.
Liberalisation aimed at reducing unnecessary government controls and licensing restrictions on economic activity. Privatisation emphasised a greater role for the private sector, while Globalisation sought to integrate the Indian economy more closely with international trade, investment and global markets. NIOS identifies reduced licensing restrictions, greater private participation and global integration as important elements of the LPG reforms.
The 1991 reforms represented an important change in India's economic-policy framework. The Government of India's Economic Survey also treats the 1991 economic liberalisation as a major turning point in the evolution of the Indian economy.