(i) Rise in Prices:

(ii) Rise in Fiscal Deficit:

(iii) Increase in Adverse Balance of Payments:

(iv) Iraq War:

(v) Dismal Performance of PSU's (Public Sector Undertakings):

(vi) Fall in Foreign Exchange Reserves

Reasons to Implement New Economic Policy in India

There are several compelling reasons why India should implement a new economic policy. These reasons range from addressing existing challenges to harnessing new opportunities for sustainable growth and development. Let's delve into the details:

1. Accelerating Economic Growth:
- A new economic policy can help in accelerating the pace of economic growth in India. By implementing reforms and introducing measures to boost investment, productivity, and innovation, the country can achieve higher GDP growth rates.

2. Job Creation:
- Unemployment remains a significant challenge in India. Implementing a new economic policy that focuses on job creation can help alleviate this issue. By promoting entrepreneurship, skill development, and labor-intensive industries, the policy can generate employment opportunities for the growing population.

3. Reducing Poverty and Inequality:
- India has a high poverty rate and significant income inequality. A new economic policy can address these issues by promoting inclusive growth. Measures such as targeted social welfare programs, redistribution of wealth, and equitable access to education and healthcare can help reduce poverty and bridge the income gap.

4. Attracting Foreign Direct Investment (FDI):
- FDI plays a crucial role in boosting economic growth and industrial development. A new economic policy can create a favorable investment climate by simplifying regulations, improving infrastructure, and providing incentives to attract foreign investors. This can lead to increased capital inflows and technology transfer.

5. Enhancing Global Competitiveness:
- To compete effectively in the global market, India needs to improve its competitiveness. A new economic policy can prioritize structural reforms to enhance productivity, encourage innovation, and develop a skilled workforce. This will enable Indian businesses to compete globally and attract international investments.

6. Sustainable Development:
- India faces various environmental challenges, including climate change, pollution, and resource depletion. A new economic policy can integrate sustainable development principles by promoting clean energy, green technologies, and environmentally friendly practices. This will contribute to long-term economic growth while minimizing environmental degradation.

7. Strengthening Infrastructure:
- Inadequate infrastructure is a significant bottleneck for India's economic development. A new economic policy can prioritize investments in infrastructure projects such as transportation, power, and digital connectivity. This will enhance productivity, facilitate trade, and attract investments across sectors.

8. Promoting Digitalization:
- Embracing digitalization can bring numerous benefits to India's economy. A new economic policy can focus on promoting digital technologies, e-commerce, and a digital payment ecosystem. This will drive efficiency, improve access to services, and foster innovation and entrepreneurship.

In conclusion, implementing a new economic policy in India is crucial to address existing challenges, stimulate economic growth, reduce poverty, attract investments, enhance competitiveness, promote sustainable development, strengthen infrastructure, and embrace digitalization. By taking these steps, India can create a conducive environment for inclusive and sustainable economic progress.