What were the reasons of adopting the new Industrial Policy?

1.	What were the reasons of adopting the new Industrial Policy?
Answer» The reasons of adopting the new Industrial Policy were : 1. The fiscal deficit was continually growing due to increase in non-developmental expenditure and it became 8.4 per cent of Gross Domestic Product in 1990-91. 2. Payment of interest increased to 36.4 per cent of total expenditure in 1990-91. 3. Fiscal deficit was increasing in the Balance of Payment of India. 4. Rate of inflation had become 17 per cent. 5. In 1991, the foreign exchange reserves of India decreased to a quantity that could fund imports just for a fortnight.

Answer»

The reasons of adopting the new Industrial Policy were :

1. The fiscal deficit was continually growing due to increase in non-developmental expenditure and it became 8.4 per cent of Gross Domestic Product in 1990-91.

2. Payment of interest increased to 36.4 per cent of total expenditure in 1990-91.

3. Fiscal deficit was increasing in the Balance of Payment of India.

4. Rate of inflation had become 17 per cent.

5. In 1991, the foreign exchange reserves of India decreased to a quantity that could fund imports just for a fortnight.

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