New Economic Policy of India

New Economic Policy of India

Economic liberalisation started in India in 1991

PM: P.v Narshima Rao

Finance Minister: Dr Manmohan Singh

Goal: To increase Private investment and Foreign Investment.

Shift in economics Policy: From centrally governed economy to Market oriented.

China liberalised economy in 1978


Steps taken for Liberalisation (Upto 80 papers required for establishment of a firm)

  1. 1966
  2. 1985
  3. 1991

India paid 20 tonnes of Gold to UBS (Union Bank of switzerland)

India paid 47 tonnes of Gold to Bank of England

What is Economic Liberalisation

Economic liberalisation is opening up economy for private sector & increase global competitors to bring down inflation and increase competition.

Targets and objectives of NEP- 1991

  1. Bring down rate of Inflation.
  2. Increase Foreign exchange reserve.
  3. Increase rate of Economic growth.
  4. Change economy from centrally governed economy to Market economy.
  5. Increase in participation of Private investors and International Investors in economy.

Measures adopted during New Economic Policy.

  1. Restriction on MRTP (Monopolistic restrictive trade Practice Act )
  2. Commercial banks were allowed to determine their own rate of interest under guideline of RBI.
  3. SSI limits were increased to 1cr.
  4. Import of capital goods were allowed.
  5. Expansion of industries were freed upon: forward integration and backward integration were allowed to reduce cost

Removal of Licensing

Licensing was limited to


  • Cigarettes
  • Chemicals
  • Liquor
  • Defence equipments
  • Explosives
  • Drugs


Steps taken for Privatisation

To increase capital inflow, privatisation of PSU was done. Most of PSU’s were running in losses because of political motives or political interventions.


  1. Disinvestment in PSU through sales of shares
  2. Minimisation of Public sector and limiting to 3 sectors
    1. Railway
    2. Atomic Minerals mining
    3. Atomic energy


  1. Globalization
  1. Tariffs were reduced.
  2. Long term trade policies.
  1. Policies were liberalised.
  2. Control on foreign trades were removed.
  3. Competition was open and genuine for Indian companies or foreign companies.

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UPSC study material & Notes
5 Year Plan

1st time 5 year plan was introduced by Joseph stalin in Russia in 1920. 5 year Plans are basically structure of communist economy , which was well absorbed in Indian economic system.

3 Major countries who work on 5 year plan are



  • Russia
  • China
  • India

Best SSC coaching of Delhi


5 year Plans in India

1 First Plan (1951–1956): With Growth rate of 2.1% and total capital of  2069 cr which was later revised to 2378 cr , focus of 1 st 5year plan was on primary sector. Agriculture and Minning. 27.2% was invested on agriculture and Energy requirements of country while transportation and communication 24%. 5 Year Plan saw many changes from successive governments after New Economic Policy.

3 Second Plan (1956–1961):
4 Third Plan (1961–1966)
5 Fourth Plan (1969–1974)
6 Fifth Plan (1974–1979)
7 Rolling Plan (1978–1980)
8 Sixth Plan (1980–1985)
9 Seventh Plan (1985–1990)
10 Annual Plans (1990–1992)
11 Eighth Plan (1992–1997)
12 Ninth Plan (1997–2002)
13 Tenth Plan (2002–2007)
14 Eleventh Plan (2007–2012)
15 Twelfth Plan (2012–2017)


Suresh D Tendulkar: In economic advisory council from 2004-08

Chairman from 2008-09

Poverty line: 972 in rural India and 1407 in urban India

Targeted growth rate was 9%

Montek singh Ahluwalia re structured to 8%


Indian Agriculture

Agriculture of India


Agriculture started in India since early Neolithic period (8000 BC- 4000 BC)

Earlier form of agriculture was Pastoralism

Notes on Indian agriculture provided by best SSc Coaching

Dominance of agriculture started during Indus valley civilization (3300 BC-1300 BC)

India ranks 2nd in output of Agricultural Products globally.

Contribution of Agriculture in GDP

2013-14: 13.7%

2014-15: 17.01%

2015-16: 15.35%
Salient Features of Indian agriculture

for current affairs for SSC


  1. Agriculture contributes about 17% in Indian economy and about 55% of people get livelihood from Agriculture.
  2. 60% of Indian agricultural land depends on Rain fall . 48% for food crop 62% for non food crop.
  3. During 1957-58 , India had 109 million hectare cultivable land which is now 122 hectare (As reported by RBI)
  4. Major Commercial crops
  1. Groundnuts
  2. Mustard
  3. Soyabean
  4. Sugarcane
  5. Tea
  6. Coffee
  7. Cotton
  8. Jute
  9. Tobacco
  1. Contribution of Agricultural in exports from India is 13.7%


Indian payment policy is dual payment policy to farmers from Indian Government , at least on books.

  1. MSP: Minimum Support Price.
  2. Procurement Price.

Buffer Stock Norms

Buffer stock refer to stock which central government maintains for meeting requirement of nation at any point of time. Buffer stock norms has been most recently revised on 22 Jan 2015.  This system was earlier known as Buffer stock or strategic reserve.


Stocking norms are for two factors.

  1. Operational stock: To meet operational and distributional requirement through PDS.
  2. Food Security reserve: To meet requirement during shortfall or delay of procurement.

PDS: Public distribution system in India is a system of distribution of staple foods such as Rice, Sugar , Wheat and few other necessary commodities like kerosine for poor people of nation on subsidised rate from market.

This system is jointly maintained by state and central government through Ministry of Consumer affairs.


Major Agricultural Revolutions in India


Blue Revolution: To increase production of aquatic food in 1960. Mr Hiralal chaudhary is known as father of Blur revolution in India. Indian government has recently reincarnated its focus on blue revolution by targeting total export to 1,00,000 cr in 5 yrs.


Brown Revolution: For cocoa production and Now focus on organic cocoa production run in Vishkapatnam region also target Leather production. Brown revolution is helping cocoa growing people to increase per unit production output.


Golden fiber Revolution: For Production of Jute. Golden fiber revolution made India 7th largest producer of wool in world.


Golden Revolution: To enhance agricultural output through Horticulture and harnessing of Honey. Improving quality of Bee breeding around period of 1991-2003.


Green revolution: India was facing shortage of food grains after war with China in 1962 and Famine in 1965-66 and 1966-67 . With help of American scientist Dr Norman Borlaug , Father of green revolution Dr M.S. Swaminathan introduced high yielding wheat seeds and proper utilization of Fertilizers. This made India self sustained in its food supply and further contributed in making India 2nd largest grower of food around globe. This was named as Green Revolution by Dr William Gande.


Grey Revolution: Grey revolution brew with or little prior to green revolution or can be said that grey revolution has been behind success of Green revolution which was all about usage of Fertilizers in Indian farms was run from 1964.


Pink Revolution: Pharmaceutical products, Onions and Prawn production.

Red Revolution: As name suggests Meat production and Tomato production.

Round Revolution: Potato Production.

Silver Fiber revolution: Cotton revolution

White Revolution: Started in India during 1970 by NDDB ( National development dairy board)

Mr Varghese Kurien , known as father of white revolution.

India was a dairy deficit nation and white revolution made India largest producer of dairy products in world about 17% of global output in 2010-11.

Per capita consumption of dairy products doubled in India.

White revolution took its shape for mil products and dairy products in three phases in India.

Phase 1: 1970-1980

Phase 2: 1981-1985

Phase 3: 1985-1996


Yellow Revolution: Oil seed production during 1998 but India again is oil seed deficit nation

Ambrosia revolution: To connect rivers

Evergreen Revolution: for complete agricultural growth.

Indian Economy : Sectors of Indian Economy

Sectors of Indian Economy

As per the experts in the field of economy, there are mainly three sectors of  Indian economy which includes the details as given below for respective sector.

Sectors of Indian economy

Primary sector

  • Activities are associated with production of goods by exploitation of the natural resources.
  • This sector forms the basis for all other products.
  • Since most of the natural products we get are from agriculture, dairy, fishing, Forestry etc so this sector is also called “Agriculture” sector.
  • For instance-cotton cultivation, Wheat cultivation, Sugarcane cultivation

Secondary sector

  • Activities in which natural products are converted into the usable forms through the ways of manufacturing come under secondary sector.
  • It is also called “Industrial sector” or “Manufacturing sector”.
  • For example using cotton fiber from the plant we spin, yarn and weave cloth.
  • Also using sugarcane as raw material we make ‘sugar’ or ‘gur’(Jaggery).

Tertiary sector

  • These are the activities that help in the development of the primary sector and the secondary sector.
  • They are the support or aid for the production processes.
  • Also known as “service sector” as they generate services.
  • E.g. Transportation, Storage, Communication, Banking & trade.
  • Some services that do not aid production also come under this category like teachers, doctors, administrators, cobbler, lawyers etc.

Note- We need not count individual goods and services to know the total production in each sector. We only count final goods and services because the value of the final goods already includes the value of all the intermediate goods that are used in making the final good.

  • The value the final goods and services produced in each sector during a particular year provides the total production of the sector for that year.
  • The sum of production in the 3 sectors gives Gross Domestic Product (GDP).
  • It is the value of final goods and services produced within our country during the year.

These notes on Indian Economy have been contributed by Plutus Academy, one of the best coaching institute for SSC and Bank Po examinations.


Economics Basics: Theory of Consumer Behavior


Economics Basics: Theory of Consumer Behavior

Consumer Budget :   A consumer having fixed budget to buy a set of goods is consumer’s budget. Its exchange value of a consumer for a set of product and a particular time.
Example: In case of Richa , her pocket money was Rs 2000 which was her monthly budget.

Budget Set:  Set of products or bundle of products which a consumer can exchange or get under restriction of his/her budget is called Budget set.


In case of Richa : She prioritised as follows

  1. Get her spectacles.
  2. Transportation for 30 days.
  3. Buy 2 Book.
  4. Birthday of Brother will be settled in about Rupee 500.
  5. Go for a movie with two friends.

Other sets which Richa could have got in Rupee 2000 are as follows

  1. Get her spectacles.
  2. Transportation for 30 days.
  3. Buy 2 Book.
  4. Birthday of Brother will be settled in about Rupee 700.
  5. Go for a movie alone.

And many more such sets according to her preference under Consumer budget of Rupee 2000.

Rupee 2000 ≥ P1x1+p2x2+p3x3+pnxn in case of Richa

Where p1 , p2 till pn  are set of products and x1 , x2 till xn are cost for respective product.

Budget line:  The set of products or bundle of Products which are selected by consumers on line of Budget is called Budget line.

In case of Richa any number of variation of Richa’s selection of products which cost exactly equals to Rupee 2000 is budget line.


Challenges in Budget set

P1x1+P2x2+Pnxn > M

Change in Budget Set

P1x1+P2x2+Pnxn > M

P1x1+P2x2+Pnxn < M

Monotonic Preference

When a consumer get satisfied with one set of product more than other set of product in terms of volume as in 1 set volume is more and other is equal then this sort of preference is known as Monotonic Preference.

Price Ratio and slope of Budget line

Substitution Between Goods

Amount of goods consumer is willing to give up for another goods is substitution of goods.

Two sets of goods

Set 1:  (x1, x2)

Set 2:{ (x1+Δx1) + (x2+Δx2)} where Δx1 > 0 and Δx2 <0

Rate of substitution = Δx2/Δx1

Diminishing rate of Substitution:  Amount of goods x1 we are using more to respective decreasing of goods x2 is rate of substitution.

Indifference curve:  


Plutus Academy has contributed these notes, one of the top coaching institute for  SSC and IBPS exams.

Job Prospectus In SSC Exam

The complete research about the Job Prospectus In SSC Exam and also about the SSC Exam.

SSC-CGL is most imperative exam for graduates to get a prominent govt. employment in regarded offices. Through this exam, SSC selects more than 20000 graduates on regarded posts in govt. workplaces. Most likely, SSC notices comes in February and March. Anyway, it is not certain, it can take additional time too. In the wake of impending notices of SSC CGL, everybody need to experience the ill effects of the issue of rounding out occupations inclination. Everybody has generally thought regarding posts and an excessive amount of uncertainty about the occupation profile and future degree. Nobody beyond any doubt what is the employment profile of diverse officers and what the future degree is in the wake of getting officer post in regarded Govt. Office. Here, we are going to clarify employment profile of every post and also advantages and disadvantages.

Presently, it is dependent upon you which division you need to go. It would be ideal if you read out quickly about every post before filling inclination as this methodology in irreversible. Above all else, you need to verify that which profession you need to pick; work area employment or field work. Each field has its own significance and cons.

SSC CGL needs just 1 year hard arrangement after that everything would be in your grasp. As there are so abundantly regarded employments accessible through SSC CGL exam, so we should not stress over posting and sort of Jobs. Yet, before submitting inclination for employments amid internet filling structure, we ought to think about fundamental of every occupations and sort of occupations which we can get however this exam. Now and then, SSC offers choice to change inclination later. Anyway, it is not necessary. Along these lines, you have to pass your psyche before filling frame and finish your inclination and make a decent attempt to get ideal score for getting that post.