Impact of the New Economic Policy

Topics: Poverty, Economic policy, Economics Pages: 4 (1179 words) Published: March 6, 2013
Coming to the issue of the impact of the new economic policy on the vulnerable sections, Rangarajan argues, "analytically, we need to address two sets of issues.

One is whether the new economic policy affects in any way the specific policy measures that we normally undertake in order to improve the conditions of the poor. Second, is there anything in the new economic policy which per se has an anti- poor bias? The new economic policy which may be a convenient expression to refer to the measures introduced since July 1991 is not the total economic policy of the Government.

There are many other elements which continue to remain as an integral part of the overall economic policy. Among these are the measures which can be broadly termed as anti-poverty programmes. In the total economic policy there are four elements which can be identified as being meant specifically for poverty alleviation:

First, since agriculture is the mainstay of the majority of. the population, growth in agriculture and, therefore, resources allocated for agriculture are an important part of the attack on poverty. This is not an acceptance of the trickle-down theory. It is common knowledge that in states in which agriculture has made spectacular progress poverty levels have come down. Therefore, allocation of resources for agriculture is an important indicator.

Second, we have evolved over time a reasonably satisfactory food security system. An integral part of this is the public distribution system. With all its shortcomings, the public distribution system has played a notable role in avoiding acute conditions of scarcity and met to a certain extent the minimum requirements.

Third, there has been a substantial expansion in programmes which are intended to provide additional employment. The various employment guarantee schemes as well as the credit-related integrated rural development programmes are examples of such programmes.

Fourth, expenditure on education and...
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