2. INTRODUCTION OF L.P.G
• The industrial policy was announced on July 24,1991 by the
government , headed by prime minister P.V Narasimha Rao along with
the finance minister Dr. manmohan singh . Narasimha Rao
government reduced the import duties, opened reserved sector for
the private players, devalued the Indian currency to increases the
export. This is also known as the LPG Model of growth.
• LIBERALIZATION
• PRIVATIZATION
• GLOBALIZATION
3. INTRODUCTION OF LIBERALIZATION
-Liberalization refers that limited government regulations and
restrictions in the economy in exchange for more participation of
private firms.
Thus ,when government Liberalizes trade it means it has removed the
tariff , subsidies and other restrictions on the flow of good and services
between countries .
Economic reforms were based on the assumption that market forces
could guide the economy in a more effective manner than government
control examples of one of other undeveloped countries like Korea,
Thailand , Singapore etc.
4. Reforms taken during Liberalization
• Abolition of industrial licensing and registration
• Liberalizing the MRTP act
• Freedom for expansion and production
• Increases in the investment limit of the small industries
• Freedom to import capital goods
• Freedom to import technology
• Free determination of interest rates
5. ADVANTAGE
• Increases the foreign investment
• Increase the foreign exchange reserve
• Increase in consumption and control over price
• Competition promotes efficiency , so resources are wasted much less
• liberalization removes government regulations on the economy
,which promotes jobs , lower prices ,higher incomes and lowers
inflation.
