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Why is the New Economic Policy called a limited return of market in a socialist state?

Answer and explanation

Correct answer: Because small trade and private enterprises were allowed to a limited extent, while major industries remained under state control

Under the New Economic Policy (NEP), peasants could sell surplus produce after paying tax, and small traders and small private enterprises were permitted to operate to a limited extent. However, key sectors such as banks, heavy industry and foreign trade remained under state control. Therefore, it was not complete capitalism but a limited return of market activity within a socialist system. Option B is incorrect because major industries and banks were not privatised. Exam tip: remember NEP as ‘limited private trade + state control over key sectors’.

Related tags

New Economic PolicyRussian RevolutionSocialismState ControlPrivate TradeSoviet EconomyThe Russian RevolutionSocialism In Europe And The Russian Revolution

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