Question

Discuss two programmes involved to restructure the society under the New Economic Policy (NEP).

Answer 1

The New Economic policy was established in Russia, with an aim to restrict the socialist society which was harming the economy rather than saving it and had led to depletion of capital reserves up and beyond to a point wherein no one wanted to purchase goods and services from the Russia.

The resultant was that the government announced the policy with a view of ending socialism in the country and promoting free market economics in which the forces of demand and supply would decide the pricing in the market rather than government-based programs or setups.

Accordingly, the following are two critical economic policies implemented during the time period.

1) Free Markets: -

In the policy, free markets were encouraged which are largely market oriented demand and supply models in which the government does not control what goods and services are to be produced and the exact quantity in which the production would take place is in the hands of the producers. They then decide as per the needs of the consumers as to what goods they would invest in. Competition is encouraged which led to rapid development of Russia as we know it today.

2) Allowing foreign trade: -

The second critical thing to do was to invite foreign trade into the country. This largely meant that all stake holders were allowed to invest capital reserves into the country and multinational corporations came into existence which were a distant dream prior to the implementation of the new economic policy program. The country saw significant income pouring in and investment from cross border helped in increasing innovation and led to additional revenue for the country.

Thus, we can largely conclude by saying that the New Economic Policy was a program implemented in Russia towards ensuring a free market economy comes into existence in the society. This largely helped the country in attracting foreign capital reserves and the programs implemented were such that they increased the flow of money into the economy. It largely helped the agricultural sector in growing at first and then extended down to all major industries which began seeing increased demand and supply.

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