The process of the new economic policy started in 1985 and got momentum in 1991.

Features of Economic Policy, 1991:

• Delicensing: The new industrial policy abolished all industrial licensing, except 18 specified industries related to security and strategic concerns and social reasons. 
• Abolition of MRTP Act: No prior approval of the MRTP commission is now required for setting up industrial units by the large business houses.
• Encouragement to Small Scale Industries (SSI): The investment limit of the SSI has been increased up to 5 crores which will help to upgrade their machinery.
• Encouraging Foreign Investment: Many industrial units were open to foreign investment under the 1991 policy. The limit was raised to 51% and 100% in some industries and 100% in mining, pollution control equipment, electricity generation projects, ports, etc. 
• Reducing the role of the Public Sector: The number of industries reserved for the public sector was reduced from 17 to 2, it includes railways and atomic energy.
• Trade Liberalisation: Relaxation is given to importers by abolishing import licensing controls. The permission for external credit and set up of Special Economic Zones (SEZ) to promote export. To promote agricultural export Agro Export Zones (AEZ) were introduced. 
• Reforms in Insurance Sectors: The Insurance Regulatory and Development Authority Act (IRDA) has given licenses to many private companies to start insurance businesses which ended the monopoly of government e.g. Max Life, Bajaj, Allianz, Aegon, etc. 
• Reforms in Financial Sector: The NEP has allowed private banks and foreign banks to do hanking business in the financial sector.