<Ul> <Li> </Li> <Li> </Li> <Li> </Li> </Ul> <P> Indian economic policy after independence was influenced by the colonial experience (which was seen by Indian leaders as exploitative in nature) and by those leaders' exposure to Fabian socialism . Policy tended towards protectionism, with a strong emphasis on import substitution, industrialisation under state monitoring, state intervention at the micro level in all businesses especially in labour and financial markets, a large public sector, business regulation, and central planning . Five - Year Plans of India resembled central planning in the Soviet Union . Steel, mining, machine tools, water, telecommunications, insurance, and electrical plants, among other industries, were effectively nationalised in the mid-1950s . Elaborate licences, regulations and the accompanying red tape, commonly referred to as Licence Raj, were required to set up business in India between 1947 and 1990 . </P> <P> Before the process of reform began in 1991, the government attempted to close the Indian economy to the outside world . The Indian currency, the rupee, was inconvertible and high tariffs and import licensing prevented foreign goods reaching the market . India also operated a system of central planning for the economy, in which firms required licences to invest and develop . The labyrinthine bureaucracy often led to absurd restrictions--up to 80 agencies had to be satisfied before a firm could be granted a licence to produce and the state would decide what was produced, how much, at what price and what sources of capital were used . The government also prevented firms from laying off workers or closing factories . The central pillar of the policy was import substitution, the belief that India needed to rely on internal markets for development, not international trade--a belief generated by a mixture of socialism and the experience of colonial exploitation . Planning and the state, rather than markets, would determine how much investment was needed in which sectors . </P> <P> Attempts were made to liberalise the economy in 1966 and 1985 . The first attempt was reversed in 1967 . Thereafter, a stronger version of socialism was adopted . The second major attempt was in 1985 by prime minister Rajiv Gandhi . The process came to a halt in 1987, though 1967 style reversal did not take place . </P>

Mention two problems that forced india to undertake new economic policy after 1991