1. Increase in National Product:

Before 1990, the growth rate of national income was 4.7% on the implementation of new economic policy, growth rate reduced to 0.6 percent.

In 1993-94 growth rate rose to 5.0 percent at 1993-94 prices and in 1996-97 it rise to 8.2 percent.

In 2000-01 growth rate was witnessed to be 6.2%.

2. Foreign Investment:

With the implementation of new economic policy foreign capital investment has increased. In 1990, total foreign investment was 5133 million dollar and it increased to 6133 million dollar. In 2003-04, foreign investment was 35.31 billion dollar.

3. Agricultural Production:


Prior to implementation of new economic reforms, growth rate of agricultural production was 3%. But in 91-92 growth rate got down to 1.9%. The growth rate came down. In 1995-96 growth rate of agricultural production stood at to 6.6% and in 2003-04 it was 6.3%.

4. Foreign Currency Reserves:

New economic reforms have favourable effect on foreign currency reserves. In 1989-90, the foreign currency reserve was Rs. 6251 crore. In 1995-96, foreign currency reserve stood at Rs. 58446 crore and in 2003-04 it touched 2,07,204 crore mark.

5. Fiscal Deficit:

The main thrust of new economic policy is to bring down fiscal deficit to the extent of 3 percent of GDP. In 1991-92, fiscal deficit come down to 5.9% and further to 5.2% in 1992-93. No doubt, after the implementation of economic policy fiscal deficit has reduced but Govt. is still far away from its target. As in 1995-96 fiscal deficit rise to 7.9% against the target of 4.7%. Moreover, it again moved to 4.5% in 2003-04.

6. Imports:

Growth rate of imports saw wide fluctuation after the implementation of new economic policy. In 1991-92, growth rate of imports declined to 11% against 22% in 1990-91. But in 1992-93 it jumped to 32.4%. Then in 1995-96, it come down to 15%. In 2003-04, growth rate of imports declined to 20.8 percent.

7. Deregulation of Interest Rate:


Interest rate has been deregulated as a part of money market reform. Bank rate has been reduced to 6%. The Cash Reserve Ratio was reduced to 4.5% which put more cash with the banking system of the country. Lower interest rate would stimulate investment. The rate of interest on housing loan was 7.5% per annum.

8. Control of Inflation:

The new economic policy tried to maintain the price level. In August 1991, the rate of inflation was 17% and in 1997-98 it fell down to 4.9%. In 2002-01 the inflation rate was 3%. It encouraged the growth of the economy.