Mention the main components of New Economic Policy.

The main components of new economic policy are as follows:

(i) New Industrial Policy : Following steps have been taken in the new industrial policy:

(a) Concession from Monopolies Act.

(b) Liberalisation.

(c) Expansion of Private Sector.

(d) Contraction of Public Sector.

(e) Foreign technology agreements.

(f) Foreign direct investment.

(ii) New Trade Policy : The objective of new trade policy is to liberate foreign trade from several restrictions to make it more competitive. The main features of this policy is globalisation of Indian economy and free interaction of the economy with developed countries of the world in the field of production, trade and finance. It is to encourage foreign trade and investment by removing all restrictions.

(iii) New Fiscal Policy : The objective of the new fiscal policy is to bring down fiscal deficit. Taxation system has been made more scientific and rational. Maximum rate of income tax has been reduced from 50 percent to 30 percent.

(iv) New Monetary Policy : On the recommendations of Narasimham Committee, significant monetary reforms has been introduced. Liquidity ratio have been reduced. Banking system has been reformed and more freedom has been given to the banks. There was a focus of financial reforms to make available credit to the producers at low rate of interest.