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Liberalization, Privatization,        Globalization           General Economics
Reasons for implementing LPG Excess     of   consumption   and  expenditure over revenue resulting  in heavy government b...
Reasons for implementing LPG   Various    distortions     like poor    technological development shortage of    foreign e...
Liberalization   Liberalization refers to relaxation of    previous government restrictions    usually in areas of social...
Privatisation   It refers to the transfer of assets or    service functions from public to    private ownership or contro...
Conditions for privatisaton   Liberalisation and de-regulation of    the economy is an essential pre-    requisite if pri...
Conditions for privatisaton   Capital     markets   should     be    sufficiently developed to be able to    absorb the d...
Arguments in favour of privatisation   Privatisation will help reducing the    burden on exchequer.   It will help the p...
Arguments in favour of privatisation   It will help in improving the quality    of decision-making of managers    because...
Arguments in favour of privatisation   Privatisation may help in reviving sick    units which have become a liability on ...
Arguments against privatisation   Privatisation will encourage growth    monopoly power in the hands of big    business h...
Arguments against privatisation   Privatisation may result in lop-sided    development of industries in the country.   T...
Privatization   Privatization      offers   both    opportunities and threats to the    economy. We have to privatize in ...
Disinvestment   Disinvestment means disposal of    public sector’s units equity in the    market or in other words sellin...
Disinvestment   In    India,  disinvestment   has    progressed slowly. It has been    carried out in a hasty, unplanned ...
Privatization and Disinvestment in India   Privatization in India generally is in    the form of disinvestment of equity....
Example of Privatization in India Lagan jute machinery company  limited (LJMC). Modern     food industries limited  (MFI...
Methods of Disinvestment   Initially, equity was offered to retail    investors through domestic public    issues. This w...
Methods of Disinvestment   Other methods includes cross-holding    (the government simply selling part of    its shares i...
Methods of Disinvestment   Of late, the government was    pursuing      the    strategic   sale    method. Under this met...
Methods of Disinvestment   Under strategic sales method,    disinvestment price would be    market based and not prefixed...
Methods of Disinvestment   Presently the government has decided to    call off the disinvestment of stake through    stra...
Globalisation   Globalisation means integrating    the domestic economy with the    world economy. It is a process    whi...
Globalisation   It involves increasing interaction    among national economic system,    more integrated financial market...
Cases for Globalisation   It is argues that Globalisation of under    developed countries will improve the    allocative ...
Cases for Globalisation It will help to restructure the  production and trade pattern in a  capital scarce, labour abunda...
Cases for Globalisation   With the entry of foreign competition and    the removal of import tariff barriers,    domestic...
Cases for Globalisation   It is believed that the main effects of    integration will be felt in the    industrial and re...
Cases against Globalisation   The globalisation process is in essence a    tremendous redistribution of economic    power...
Cases against Globalisation   With the lightening speed at which    globalisation is taking place, it is    increasing th...
Cases against Globalisation   Globalisation is helping more the    developed economies than the developing    economies.....
Measures towards Globalisation   Convertibility of Rupee: To make the    currency fully convertible i.e., allow it to    ...
Measures towards Globalisation   Opening the economy to foreign    capital: The government has taken a    number of measu...
Effects of Globalisation of Indian economy   India’s share in the world ‘export’    which had fallen 0.53% in 1991    fro...
Effects of Globalisation of Indian economy   Our foreign currency reserves    which had fallen to barely one    billion U...
Effects of Globalisation of Indian economy Exporters are responding well to  sweeping reforms in exchange rate  and trade...
Effects of Globalisation of Indian economy   The current account deficit was over    3% of GDP in 1990-91. In 2004-05 and...
Effects of Globalisation of Indian economy   International confidence in India has been    restored.   Consumer are bene...
Main organization for facilitating globalisation   There     are    many      international    organisation which have fa...
International Monetary Fund   IMF was organized in 1946 and    commenced its operation in March    1947. The main objecti...
International Monetary Fund The establishment and maintenance  of currency convertibility with stable  exchange rate The...
Function of IMF It functions as a short-term credit  institution It provides machinery for the orderly  adjustment of ex...
Function of IMF   It    provides    machinery                              for    international consultations.   It moni...
The World Bank   The international Bank for Reconstruction    and Development (IBRD) more popularly    known as the world...
Objectives of World Bank   Investing in the people, particularly    through basic health and education.   Focusing on so...
Functions of World Bank   To help its members countries in the    reconstruction and developmental of their    territorie...
The World Trade Organisation   The WTO came in to existence on 1st    January,1995. The WTO is a powerful    body which b...
Features of WTO   The WTO is the main organ    implementing the Multilateral Trade    Agreements.   The   WTO    is   gl...
Features of WTO   It is a full-fledged international    organisation in its own right   The WTO has legal personality. ...
Functions of WTO   The    WTO     shall   facilitate the    implementation, administration and    operation of world trad...
Functions of WTO   The WTO shall handle trade disputes.   The WTO shall monitor national trade    policies.   It shall ...
Multiple Choice QuestionQuestion 1     The following are the ways of      privatization:       divestiture       denati...
Multiple Choice QuestionQuestion 1     The following are the ways of      privatization:       divestiture       denati...
Question 2     Which of the following factors cause many      governments to undertake programmes of      public sector r...
Question 2     Which of the following factors cause many      governments to undertake programmes of      public sector r...
Question 3     Reasons for privatization are      inefficiency indifference and       corruption      indifference and ...
Question 3     Reasons for privatization are      inefficiency indifference and       corruption      indifference and ...
Question 4     Globalization means       domestic liberalization       external sector liberalization       both (a) a...
Question 4     Globalization means       domestic liberalization       external sector liberalization       both (a) a...
Question 5     External sector liberalization means       relaxing restriction on international flow        of goods and...
Question 5     External sector liberalization means       relaxing restriction on international flow        of goods and...
Question 6     The main causes for economic reforms       growing inefficiency in the use of        resources       ove...
Question 6     The main causes for economic reforms       growing inefficiency in the use of        resources       ove...
Question 7     Industrial licensing was abolished for all      projects except for       12 industries       14 industr...
Question 7     Industrial licensing was abolished for all      projects except for       12 industries       14 industr...
Question 8     How many industries are registered      under the public sector?       5 industries       3 industries  ...
Question 8     How many industries are registered      under the public sector?       5 industries       3 industries  ...
Question 9     Up to-------------------------- direct foreign      investment allowed in high priority      industries   ...
Question 9     Up to-------------------------- direct foreign      investment allowed in high priority      industries   ...
Question 10     How many percent of FDI were allowed      in Banking sector?       30%       49%       60%       51% ...
Question 10     How many percent of FDI were allowed      in Banking sector?       30%       49%       60%       51% ...
Question 11     The different facets of new economic reform can be      summarized as       disinvestment in public sect...
Question 11     The different facets of new economic reform can be      summarized as       disinvestment in public sect...
Question 12       New Economic Reform aims at the        following objectives        privatization        liberalizatio...
Question 12       New Economic Reform aims at the        following objectives        privatization        liberalizatio...
Question 13     Financial sector reforms mainly relate to       banking sector       insurance sector       both (a) a...
Question 13     Financial sector reforms mainly relate to       banking sector       insurance sector       both (a) a...
Question 14     Expand FRA       Foreign ratio agreement       Foreign rate agreement       Forward ration agreement  ...
Question 14     Expand FRA       Foreign ratio agreement       Foreign rate agreement       Forward ration agreement  ...
Question 15     The rupee was devalued twice in -----------      ------        June 1991        August 1991        Sep...
Question 15     The rupee was devalued twice in -----------      ------        June 1991        August 1991        Sep...
Question 16     Foreign Exchange Regulation Act was      passed in the year       1973       1971       1972       19...
Question 16     Foreign Exchange Regulation Act was      passed in the year       1973       1971       1972       19...
Question 17     Expand QR       Quantitative Restrictions       Quota Restriction       Both (a) and (b)       None o...
Question 17     Expand QR       Quantitative Restrictions       Quota Restriction       Both (a) and (b)       None o...
Question 18     The QR were removed on ------------------       720 items       730 items       710 items       714 i...
Question 18     The QR were removed on ------------------       720 items       730 items       710 items       714 i...
Question 19     Expand SDR       Securities drawing rights       Special draw rights       Special drawing rights    ...
Question 19     Expand SDR       Securities drawing rights       Special draw rights       Special drawing rights    ...
Question 20     Disinvestment means       disposal of     public sector’s unit’s        equity in the market       rela...
Question 20     Disinvestment means       disposal of     public sector’s unit’s        equity in the market       rela...
Question 21     Expand TRIPs      Trade related intelligent property       rights      Trade related intellectual prope...
Question 21     Expand TRIPs      Trade related intelligent property       rights      Trade related intellectual prope...
THE ENDLiberalization, Privatization,        Globalization
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Transcript of "16785 liberalization privatization_globalization"

  1. 1. Liberalization, Privatization, Globalization General Economics
  2. 2. Reasons for implementing LPG Excess of consumption and expenditure over revenue resulting in heavy government borrowings. Growing inefficiency in the use of resources. Over protection to industry Mismanagement of firms and the economy Mounting losses of public sector enterprises General Economics:Liberalization,Privatization,Globa lization 2
  3. 3. Reasons for implementing LPG Various distortions like poor technological development shortage of foreign exchanges; and imprudent borrowings from abroad and mismanagement of foreign exchange reserves. Low foreign exchange reserves. Burden of national debt. Inflation. General Economics:Liberalization,Privatization,Globa lization 3
  4. 4. Liberalization Liberalization refers to relaxation of previous government restrictions usually in areas of social and economic policies. Thus, when government liberalizes trade it means it has removed the tariff, subsidies and other restrictions on the flow of goods and services between countries. General Economics:Liberalization,Privatization,Globa lization 4
  5. 5. Privatisation It refers to the transfer of assets or service functions from public to private ownership or control and the opening of the hitherto closed areas to private sector entry. Privatisation can be achieved in many ways- franchising, leasing, contracting and divesture. General Economics:Liberalization,Privatization,Globa lization 5
  6. 6. Conditions for privatisaton Liberalisation and de-regulation of the economy is an essential pre- requisite if privatisation is to take off and help realize higher productivity and profits. General Economics:Liberalization,Privatization,Globa lization 6
  7. 7. Conditions for privatisaton Capital markets should be sufficiently developed to be able to absorb the disinvested public sector shares. General Economics:Liberalization,Privatization,Globa lization 7
  8. 8. Arguments in favour of privatisation Privatisation will help reducing the burden on exchequer. It will help the profit making public sector units to modernize and diversify their business. It will help in making public sector units more competitive. General Economics:Liberalization,Privatization,Globa lization 8
  9. 9. Arguments in favour of privatisation It will help in improving the quality of decision-making of managers because their decisions will be made without any political interference. General Economics:Liberalization,Privatization,Globa lization 9
  10. 10. Arguments in favour of privatisation Privatisation may help in reviving sick units which have become a liability on the public sector. Without government financial backing, capital market and international market will force public sector to be efficient General Economics:Liberalization,Privatization,Globa lization 10
  11. 11. Arguments against privatisation Privatisation will encourage growth monopoly power in the hands of big business house. It will result in greater disparities in income and wealth. Private enterprise may not show any interest in buying shares of loss- making and sick enterprises. General Economics:Liberalization,Privatization,Globa lization 11
  12. 12. Arguments against privatisation Privatisation may result in lop-sided development of industries in the country. The limited resources of the private individuals cannot meet some of the vital tasks which alter the very character of the economy. The private sector may not uphold the principles of social justice and public welfare. General Economics:Liberalization,Privatization,Globa lization 12
  13. 13. Privatization Privatization offers both opportunities and threats to the economy. We have to privatize in such a manner that we make the maximum opportunities while at the same time minimizing the threats to the economy. General Economics:Liberalization,Privatization,Globa lization 13
  14. 14. Disinvestment Disinvestment means disposal of public sector’s units equity in the market or in other words selling of a public investment to a private entrepreneur. It means selling of government share in one PSU to other PSUs or private sector or banks. General Economics:Liberalization,Privatization,Globa lization 14
  15. 15. Disinvestment In India, disinvestment has progressed slowly. It has been carried out in a hasty, unplanned and hesitant manner. As a result, the progress has been quite poor. General Economics:Liberalization,Privatization,Globa lization 15
  16. 16. Privatization and Disinvestment in India Privatization in India generally is in the form of disinvestment of equity. In general, here privatisation has not led to 100% transfer of control from public sector to private sector unit. Only in exceptional cases, 100% privatization has taken place (e.g. Centaur Hotel). General Economics:Liberalization,Privatization,Globa lization 16
  17. 17. Example of Privatization in India Lagan jute machinery company limited (LJMC). Modern food industries limited (MFIL) Bharat aluminium company limited (BALCO) Hotel Corporation of India limited (HCI) Hindustan Zinc limited (HZL) General Economics:Liberalization,Privatization,Globa Paradeep Phosphates Limited (PPL) lization 17
  18. 18. Methods of Disinvestment Initially, equity was offered to retail investors through domestic public issues. This was followed by issuance of the Global Depository Receipts (GDRs) to tap the overseas markets. General Economics:Liberalization,Privatization,Globa lization 18
  19. 19. Methods of Disinvestment Other methods includes cross-holding (the government simply selling part of its shares in one PSU to other PSUs), warehousing (government’s own financial institutions buying government’s stake in select PSUs and holding them until and third buyer emerged) and retaining golden share (retaining government’s stake up to 26% in the PSU to protect its interest). General Economics:Liberalization,Privatization,Globa lization 19
  20. 20. Methods of Disinvestment Of late, the government was pursuing the strategic sale method. Under this method, the government sells a major portion of its stake to a strategic buyer and also gives over the management control. General Economics:Liberalization,Privatization,Globa lization 20
  21. 21. Methods of Disinvestment Under strategic sales method, disinvestment price would be market based and not prefixed, PSUs share’s sale would be under the department of Disinvestment and disinvestment would be delinked from the union budget exercise. General Economics:Liberalization,Privatization,Globa lization 21
  22. 22. Methods of Disinvestment Presently the government has decided to call off the disinvestment of stake through strategic sale in 13 profit-making central public sector enterprises. It is considering the public offer route to sell minority stakes in these enterprises. Of late (in 2005-06), it has resorted to ‘Differential Pricing Method’ and sold the shares of PSUs to public sector financial institution and banks. General Economics:Liberalization,Privatization,Globa lization 22
  23. 23. Globalisation Globalisation means integrating the domestic economy with the world economy. It is a process which draws countries out of their insulation and makes them join rest of the world in its march towards a new world economic order. General Economics:Liberalization,Privatization,Globa lization 23
  24. 24. Globalisation It involves increasing interaction among national economic system, more integrated financial markets, economies of trade, higher factor mobility, free flow of technology and spread of knowledge throughout the world. General Economics:Liberalization,Privatization,Globa lization 24
  25. 25. Cases for Globalisation It is argues that Globalisation of under developed countries will improve the allocative efficiency of resource, reduce the capital output ratio and increase labour productivity, help to develop the export spheres and export culture, increase the inflow of capital, updated technology that gives a boost to the average growth rate of the economy. General Economics:Liberalization,Privatization,Globa lization 25
  26. 26. Cases for Globalisation It will help to restructure the production and trade pattern in a capital scarce, labour abundant economy in favour of labour- intensive goods and techniques. Foreign capital will be attracted and with its entry, updated technology will also enter the country. General Economics:Liberalization,Privatization,Globa lization 26
  27. 27. Cases for Globalisation With the entry of foreign competition and the removal of import tariff barriers, domestic industry will be subject to price and quality improving effects in the domestic economy. It is also believed that the efficiency of banking and financial sectors will improve, as there will be competition from foreign capital and foreign banks. General Economics:Liberalization,Privatization,Globa lization 27
  28. 28. Cases for Globalisation It is believed that the main effects of integration will be felt in the industrial and related sectors. At result cheaper and high quality consumer goods will be manufactured at home. Besides, employment opportunities would also go up. General Economics:Liberalization,Privatization,Globa lization 28
  29. 29. Cases against Globalisation The globalisation process is in essence a tremendous redistribution of economic power at the world level which will increasingly translate into a redistribution of political power. One study reveals that in the globalising world the economics of the world are ironically moving away from one another more than coming together. General Economics:Liberalization,Privatization,Globa lization 29
  30. 30. Cases against Globalisation With the lightening speed at which globalisation is taking place, it is increasing the pressure on economies for structural and conceptual readjustments to a breaking point. It is becoming hard for the countries to ask their public to go through the pains and uncertainties of structural adjustment of the sake of benefits yet to come. General Economics:Liberalization,Privatization,Globa lization 30
  31. 31. Cases against Globalisation Globalisation is helping more the developed economies than the developing economies.. Like India, it is argued that it is true that letting in Cokes and Pepsis have led to opening doors for INTEL, but the sum total of their investment has been very less in relation to their investment abroad. None of the multinationals has set up manufacturing plants in India or signed any technology transfer agreement with any Indian company. General Economics:Liberalization,Privatization,Globa lization 31
  32. 32. Measures towards Globalisation Convertibility of Rupee: To make the currency fully convertible i.e., allow it to determine its own exchange rate in the international market without any official intervention. Import Liberalisation: As per the recommendation of the World Bank, free trade of all items except negative list of imports and exports has been allowed. General Economics:Liberalization,Privatization,Globa lization 32
  33. 33. Measures towards Globalisation Opening the economy to foreign capital: The government has taken a number of measures to encourage foreign capital in India. Many facilities and incentives have been offered to the foreign investors and non-resident Indians in the new economic policy. General Economics:Liberalization,Privatization,Globa lization 33
  34. 34. Effects of Globalisation of Indian economy India’s share in the world ‘export’ which had fallen 0.53% in 1991 from 1.78% per cent in 1950, has reversed trends and has improved to 1% in 2005. General Economics:Liberalization,Privatization,Globa lization 34
  35. 35. Effects of Globalisation of Indian economy Our foreign currency reserves which had fallen to barely one billion U.S. dollars in June, 1991 rose substantially to about 180 billion U.S dollars in March 2007. General Economics:Liberalization,Privatization,Globa lization 35
  36. 36. Effects of Globalisation of Indian economy Exporters are responding well to sweeping reforms in exchange rate and trade policies. The average growth of export has been more than 20% per annum since 2002-03. Exports now finance nearly 65% of imports, compared to only 60% in the latter half of the eighties. General Economics:Liberalization,Privatization,Globa lization 36
  37. 37. Effects of Globalisation of Indian economy The current account deficit was over 3% of GDP in 1990-91. In 2004-05 and 2005-06, we again had current account deficit of (-) 0.4 and (-) 1.1 per cent respectively. Our external debt crises reduced from $8 billion to $3 billion from 1990-91 to 1996-2006 respectively. Markets have started responding to the movements abroad General Economics:Liberalization,Privatization,Globa lization 37
  38. 38. Effects of Globalisation of Indian economy International confidence in India has been restored. Consumer are benefited through large variety of consumer goods, improved quality of goods and in some cases and reduced price of consumer durable. Programmes of quality management and research and development are systematically conducted by corporate sector. General Economics:Liberalization,Privatization,Globa lization 38
  39. 39. Main organization for facilitating globalisation There are many international organisation which have facilitated the process of globalisation. We shall study three main organisations here. These are International Monetary Fund (IMF) World Bank World Trade Organisation (WTO) General Economics:Liberalization,Privatization,Globa lization 39
  40. 40. International Monetary Fund IMF was organized in 1946 and commenced its operation in March 1947. The main objectives: The elimination or reduction of existing exchange control General Economics:Liberalization,Privatization,Globa lization 40
  41. 41. International Monetary Fund The establishment and maintenance of currency convertibility with stable exchange rate The widest extension of multilateral trade and payments. The solving of short-term balance of payment problems faced by its member nations General Economics:Liberalization,Privatization,Globa lization 41
  42. 42. Function of IMF It functions as a short-term credit institution It provides machinery for the orderly adjustment of exchange rates. It is a reservoir of the currencies of all the members nation who can borrow the currency of other nations. General Economics:Liberalization,Privatization,Globa lization 42
  43. 43. Function of IMF It provides machinery for international consultations. It monitors economic and financial development of its members and provides policy advice aimed at crisis preventions. General Economics:Liberalization,Privatization,Globa lization 43
  44. 44. The World Bank The international Bank for Reconstruction and Development (IBRD) more popularly known as the world bank was formed as a part of the deliberations at Bretton woods in 1945. The World Bank was floated in order to give loan to member’s countries, initially for the reconstruction of their (world) war-ravaged economies, and later for the development of the economies of the poorer member countries. General Economics:Liberalization,Privatization,Globa lization 44
  45. 45. Objectives of World Bank Investing in the people, particularly through basic health and education. Focusing on social development. Protecting the environment Supporting and encouraging private business development. Promoting reforms to create a stable macro-economic environment, conducive to investment and long-term planning. General Economics:Liberalization,Privatization,Globa lization 45
  46. 46. Functions of World Bank To help its members countries in the reconstruction and developmental of their territories by facilitating the investment of capital for productive purposes. To encourage private foreign investment and credit by providing guarantee of repayment of the private investors. To promote the long-term balanced growth of international trade and the maintenance of equilibrium in balance of payment of its member countries. General Economics:Liberalization,Privatization,Globa lization 46
  47. 47. The World Trade Organisation The WTO came in to existence on 1st January,1995. The WTO is a powerful body which broadly aims at making the whole world a big village where there is free flow of goods and services and where there are no barriers to trade. General Economics:Liberalization,Privatization,Globa lization 47
  48. 48. Features of WTO The WTO is the main organ implementing the Multilateral Trade Agreements. The WTO is global in its membership. It is the forum for negotiations among its member. General Economics:Liberalization,Privatization,Globa lization 48
  49. 49. Features of WTO It is a full-fledged international organisation in its own right The WTO has legal personality. The decision-making under WTO is carried out by consensus. General Economics:Liberalization,Privatization,Globa lization 49
  50. 50. Functions of WTO The WTO shall facilitate the implementation, administration and operation of world trade agreements. The WTO shall provide the forum for trade negotiations among its members countries. General Economics:Liberalization,Privatization,Globa lization 50
  51. 51. Functions of WTO The WTO shall handle trade disputes. The WTO shall monitor national trade policies. It shall provide technical assistance and training to developing countries General Economics:Liberalization,Privatization,Globa lization 51
  52. 52. Multiple Choice QuestionQuestion 1 The following are the ways of privatization:  divestiture  denationalization  Franchising  all the above General Economics:Liberalization,Privatization,Globa lization 52
  53. 53. Multiple Choice QuestionQuestion 1 The following are the ways of privatization:  divestiture  denationalization  Franchising  all the above General Economics:Liberalization,Privatization,Globa lization 53
  54. 54. Question 2 Which of the following factors cause many governments to undertake programmes of public sector reforms, according to Prof. Samuel Paul?  economic inefficiency in the production activities of the public sector  ineffectiveness in the provision of goods and service  rapid and in reasonable expansion of the bureaucracy  all the above General Economics:Liberalization,Privatization,Globa lization 54
  55. 55. Question 2 Which of the following factors cause many governments to undertake programmes of public sector reforms, according to Prof. Samuel Paul?  economic inefficiency in the production activities of the public sector  ineffectiveness in the provision of goods and service  rapid and in reasonable expansion of the bureaucracy  all the above General Economics:Liberalization,Privatization,Globa lization 55
  56. 56. Question 3 Reasons for privatization are  inefficiency indifference and corruption  indifference and corruption  inefficiency and irresponsibility  inefficiency, indifference, irresponsibility and corruption General Economics:Liberalization,Privatization,Globa lization 56
  57. 57. Question 3 Reasons for privatization are  inefficiency indifference and corruption  indifference and corruption  inefficiency and irresponsibility  inefficiency, indifference, irresponsibility and corruption General Economics:Liberalization,Privatization,Globa lization 57
  58. 58. Question 4 Globalization means  domestic liberalization  external sector liberalization  both (a) and (b)  none of the above General Economics:Liberalization,Privatization,Globa lization 58
  59. 59. Question 4 Globalization means  domestic liberalization  external sector liberalization  both (a) and (b)  none of the above General Economics:Liberalization,Privatization,Globa lization 59
  60. 60. Question 5 External sector liberalization means  relaxing restriction on international flow of goods and services  relaxing restriction on production, investment and prices  increasing the roll of market  relaxing restrictions on international flow of goods, services, technology and capital. General Economics:Liberalization,Privatization,Globa lization 60
  61. 61. Question 5 External sector liberalization means  relaxing restriction on international flow of goods and services  relaxing restriction on production, investment and prices  increasing the roll of market  relaxing restrictions on international flow of goods, services, technology and capital. General Economics:Liberalization,Privatization,Globa lization 61
  62. 62. Question 6 The main causes for economic reforms  growing inefficiency in the use of resources  over production of industry  mismanagement of firms and the economy  all the above General Economics:Liberalization,Privatization,Globa lization 62
  63. 63. Question 6 The main causes for economic reforms  growing inefficiency in the use of resources  over production of industry  mismanagement of firms and the economy  all the above General Economics:Liberalization,Privatization,Globa lization 63
  64. 64. Question 7 Industrial licensing was abolished for all projects except for  12 industries  14 industries  18 industries  20 industries General Economics:Liberalization,Privatization,Globa lization 64
  65. 65. Question 7 Industrial licensing was abolished for all projects except for  12 industries  14 industries  18 industries  20 industries General Economics:Liberalization,Privatization,Globa lization 65
  66. 66. Question 8 How many industries are registered under the public sector?  5 industries  3 industries  6 industries  9 industries General Economics:Liberalization,Privatization,Globa lization 66
  67. 67. Question 8 How many industries are registered under the public sector?  5 industries  3 industries  6 industries  9 industries General Economics:Liberalization,Privatization,Globa lization 67
  68. 68. Question 9 Up to-------------------------- direct foreign investment allowed in high priority industries  49%  55%  51%  50% General Economics:Liberalization,Privatization,Globa lization 68
  69. 69. Question 9 Up to-------------------------- direct foreign investment allowed in high priority industries  49%  55%  51%  50% General Economics:Liberalization,Privatization,Globa lization 69
  70. 70. Question 10 How many percent of FDI were allowed in Banking sector?  30%  49%  60%  51% General Economics:Liberalization,Privatization,Globa lization 70
  71. 71. Question 10 How many percent of FDI were allowed in Banking sector?  30%  49%  60%  51% General Economics:Liberalization,Privatization,Globa lization 71
  72. 72. Question 11 The different facets of new economic reform can be summarized as  disinvestment in public sector, delicensing of private industries  reducing agriculture subsidies and reducing tax rates  liberalization, privatization and globalization  containing fiscal deficit and reducing money supply General Economics:Liberalization,Privatization,Globa lization 72
  73. 73. Question 11 The different facets of new economic reform can be summarized as  disinvestment in public sector, delicensing of private industries  reducing agriculture subsidies and reducing tax rates  liberalization, privatization and globalization  containing fiscal deficit and reducing money supply General Economics:Liberalization,Privatization,Globa lization 73
  74. 74. Question 12 New Economic Reform aims at the following objectives  privatization  liberalization  Globalization  all the above General Economics:Liberalization,Privatization,Globa lization 74
  75. 75. Question 12 New Economic Reform aims at the following objectives  privatization  liberalization  Globalization  all the above General Economics:Liberalization,Privatization,Globa lization 75
  76. 76. Question 13 Financial sector reforms mainly relate to  banking sector  insurance sector  both (a) and (b)  transport sector General Economics:Liberalization,Privatization,Globa lization 76
  77. 77. Question 13 Financial sector reforms mainly relate to  banking sector  insurance sector  both (a) and (b)  transport sector General Economics:Liberalization,Privatization,Globa lization 77
  78. 78. Question 14 Expand FRA  Foreign ratio agreement  Foreign rate agreement  Forward ration agreement  Forward rate agreement General Economics:Liberalization,Privatization,Globa lization 78
  79. 79. Question 14 Expand FRA  Foreign ratio agreement  Foreign rate agreement  Forward ration agreement  Forward rate agreement General Economics:Liberalization,Privatization,Globa lization 79
  80. 80. Question 15 The rupee was devalued twice in ----------- ------  June 1991  August 1991  September 1991  July 1991 General Economics:Liberalization,Privatization,Globa lization 80
  81. 81. Question 15 The rupee was devalued twice in ----------- ------  June 1991  August 1991  September 1991  July 1991 General Economics:Liberalization,Privatization,Globa lization 81
  82. 82. Question 16 Foreign Exchange Regulation Act was passed in the year  1973  1971  1972  1974 General Economics:Liberalization,Privatization,Globa lization 82
  83. 83. Question 16 Foreign Exchange Regulation Act was passed in the year  1973  1971  1972  1974 General Economics:Liberalization,Privatization,Globa lization 83
  84. 84. Question 17 Expand QR  Quantitative Restrictions  Quota Restriction  Both (a) and (b)  None of the above General Economics:Liberalization,Privatization,Globa lization 84
  85. 85. Question 17 Expand QR  Quantitative Restrictions  Quota Restriction  Both (a) and (b)  None of the above General Economics:Liberalization,Privatization,Globa lization 85
  86. 86. Question 18 The QR were removed on ------------------  720 items  730 items  710 items  714 items General Economics:Liberalization,Privatization,Globa lization 86
  87. 87. Question 18 The QR were removed on ------------------  720 items  730 items  710 items  714 items General Economics:Liberalization,Privatization,Globa lization 87
  88. 88. Question 19 Expand SDR  Securities drawing rights  Special draw rights  Special drawing rights  None of the above General Economics:Liberalization,Privatization,Globa lization 88
  89. 89. Question 19 Expand SDR  Securities drawing rights  Special draw rights  Special drawing rights  None of the above General Economics:Liberalization,Privatization,Globa lization 89
  90. 90. Question 20 Disinvestment means  disposal of public sector’s unit’s equity in the market  relaxation of previous government social and economic policies  transfer of assets  none of the above General Economics:Liberalization,Privatization,Globa lization 90
  91. 91. Question 20 Disinvestment means  disposal of public sector’s unit’s equity in the market  relaxation of previous government social and economic policies  transfer of assets  none of the above General Economics:Liberalization,Privatization,Globa lization 91
  92. 92. Question 21 Expand TRIPs  Trade related intelligent property rights  Trade related intellectual property rights  Trade related intellectual prosperity rights  All the above General Economics:Liberalization,Privatization,Globa lization 92
  93. 93. Question 21 Expand TRIPs  Trade related intelligent property rights  Trade related intellectual property rights  Trade related intellectual prosperity rights  All the above General Economics:Liberalization,Privatization,Globa lization 93
  94. 94. THE ENDLiberalization, Privatization, Globalization
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