This document discusses the concepts of liberalization and privatization in India. It provides background on India's economic crisis in 1991 that prompted liberalization reforms in the financial, industrial, and trade sectors. Reasons for liberalization included a balance of payments crisis, inefficiencies, and low foreign exchange reserves. Privatization aims to reduce government involvement in commercial activities and increase efficiency. Major public sector units that were privatized in India include LJMC, MFIL, PPL, BALCO and HCI. The impacts of liberalization and privatization have included increased GDP growth rates, higher per capita incomes, and new employment and business opportunities.

1. SYNDICATE - 11
Varsha Sharma
Vishal Sharma
Sweta Kumari
Yogesh Kumar
Umesh Rawat
Vandana Dalal
Vivek Kumar
Sujoy Das
Sumith K
Sumit Solanki

3. Liberalization refers to laws or rules
being liberalized, or relaxed, by a
government.
 Relaxation of govt. restriction
 Removal of tariff , subsidies and other
restriction on the flow of good and
services.
 Basically meant for Economic
liberalisation and Trade liberalisation.

4. Reforms
taken during
Liberalization
Financial
Sector
Industrial
Sector
Trade
Sector
LIBERALIZATION : A BEGINNING

5. REASONS BEHIND
LIBERALIZATION
A Balance of Payments crisis in 1991 which pushed the
country to near bankruptcy.
Growing inefficiency on the use of resources.
Over protection to industries.
Increase in losses for public sector enterprises.
Various distortion like poor technological development,
shortage of foreign exchange and borrowing from
abroad.
Low foreign exchange reserves.

6. Financial Sector Reform
Financial Sector Reforms refers to the deregulation of
domestic financial markets and the liberalization of the
capital account
Financial Sector Reforms are:-
 Reform in Banking Sector
Reform in Stock Market
 Reform in Insurance

7. Industrial Sector Reform
Industrial Sector was among the first sectors to be
liberalized in India in a series of measures
Industrial licensing has been abolished except in a small
number of sectors where it has been retained on strategic
considerations
Industrial Sector Reforms are:-
Abolition of industrial licensing
Restriction were removed on expansion
 Reduction in the reservation of public sector

8. Trade Sector Reform
Trade policy allowing domestic providers (of goods and/or
services) to compete more freely in world markets and
foreign providers to compete more freely in domestic
markets
Trade Sector Reform :-
 Elimination of Import Licensing
 Rationalization of Tariff Structure
 Adoption of Flexible Exchange rate

9. ROLE OF PUBLIC SECTOR IN
GROWTH OF INDIA
Economic development
Development of backward Areas
Employment generation
Defence
Labour welfare
Consumer welfare
Public utilities
Self-reliance

10. The low annual growth rate of the economy of India
went up its peak
Increase Per capita income of country.
Increased infrastructure of the nation.
Removing barriers to international investing.
Increased willingness to do business in the country

11. • “The transfer of public assets, operations
or activities to private enterprise”.
• Privatization is the process of transferring
ownership of a business, enterprise,
agency, public service or public property
from the public sector to the private
sector.

12. REASONS BEHIND
PRIVATIZATION
•To reduce government involvement in
commercially viable activities
•Increase efficiency in the delivery of
programs and services
•Provides competition in market place
which transfers the lower price and
greater choice for the consumers.

13. • Privatization may help in reviving sick units which
have become a liability on govt.
• It frees the resources for a more productive
utilization.
• Private concerns tend to be profit oriented and
transparent in their functioning.
• It reduces political influence on decision making of
managers.
• It helps in making public sector unit more
competitive.

14. • Lagan jute machinery company limited (LJMC).
• Modern food industries limited (MFIL)
• Paradeep Phosphates Limited (PPL)
• Bharat aluminium company limited (BALCO)
• Hotel Corporation of India limited (HCI)
• Hindustan Zinc limited (HZL)
Successful Privatizations in India

15. IMPACT ON EMPLOYMENT
•Newlaborpolicies
•Newjobopportunities
•Motivatespeopletostarttheirownbusiness
•Improvedstandardofliving
•Increasedpurchasingpower

16. The overall impact of liberalization &
privatization on Indian economy is
positive because it creates new
business opportunities for the people
& it clearly indicates that the GDP
compared to the past has been
rapidly developing with an improving
rate every year.