PROJECT ON LPG POLICY

1. LIBERALIZATION PRIVATIZATION GLOBALIZATION

2. Certificate
This is to certify that Harsh Jain a student of class XI has successful completed
the research on the project “LPG policy” under my supervision . He has taken
proper care and show utmost sincerity in the completion of this project. I
certify that this project is up to my expectations and as per the guidelines
issued by CBSE.

3. ACKNOWLEDGEMENT
I would like to express my special thanks of gratitude to my teacherALKASHARMAMA’AM
who giveopportunity to do wonderful project on the topic LPGpolicy, which also helpedme in
doinga lot of Research and I came to know about so many news things I amreally thankful to
them.
SecondlyI would also like to thank my parents and friendwho helped me a lot in finalizing the
project within the limited time frame.

4. INDEX

5. S.No
Particular Remark
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Introduction
Reasonsfor implementing LPG
Impact on India
Liberalization introduction
Measurestakenfor liberalization
Post liberalisationchange
Benefitsof liberalization
Limitation of liberalization
Privatizationintroduction
Disinvestment
Measuresadopt for privatization
Advantagesof privatization
Limitationsof privatization
Successfulprivatizations in India
Globalizationintroduction
EconomicGlobalization
MeasuresAdopted for globalization
Positive Effectof Globalization
Negative effectof Globalization
Main Organization facilitatingGlobalization
Conclusion

6. INTRODUCTION LPG
Indianeconomy had experienced major policy changes in early1990s. The new economic reforms, popularly
known as, Liberalization, Privatizationand Globalization(LPG)
It was aimed at marketing the Indian economy as fastest growing economy and globallycompetitive. The
series of reforms undertakenwith respectto industrial sector, trade as well as financial sector aimed at
making the economy more efficient.

7. REASONS FOR IMPLEMENTING LPG
Large and growing fiscal imbalances. (Gross fiscal deficit rose to 12.1%of GDP in 1991).
Growinginefficiency in the use of resources.
Low foreign exchange reserves. ($1.2billion in January 1991)
High inflation rate (13.87%in year 1990-91)
The lowannual growth rate of Indian economy stagnatedaround 3.5%from1950s to 1980s.
Whileper capita income averaged 1.3%.

8. IMPACT ON INDIA
 Indian opened up of the economy in the early nineties following a major
crisis that led by a foreign exchange crunch that dragged the economy
closer to defaulting on loans .
 The response was a number of Domestic and external sector policy
measures partly promoted by the immediate needs and partly by the
demand of the multilateral organizations.
 The new policy regime radically pushed forward in favour of a more open
and market oriented economy.

10. LIBERLIZATION
 It means the processof openingup of the Indian economyto trade and investment withrest of the world.
 It means that openingthe Door for doing Business to all over the world.
 Till 1991 Indiahad a import protectionpolicy where in trade withrest of the worldwas limited to exports.
 Foreign investment was verydifficult to come into Indiadue to a bureaucratic framework
 After the start the economic liberalization, Indiastarted gettinghuge capital inflows and it has emerged as the 2nd fastest
countryin the world.

11. MEASURES TAKEN FOR LIBERLIZATION
 Freedomforexpansionandproductionto industries.
 Increasein theinvestmentlimitof thesmallindustries.
 Freedomto importthecapitalgoodandrawmaterial.
 Freedomto importtechnology.
 Liberalizationof exportandimporttransaction.
 Liberalizationintaxationpolicy.
 Liberalizationincapitalmarkets.
 Liberalizationinbankingsector.
 Increasetheforeigninvestment.
 Increasetheforeignexchangereserve.
 Increasein consumption.

12. Post liberalisation
change
Steptowardprivatisation
Foodsubsidiesreduce
The rupee devalued
Restrictionson foreign
directinvestment removed
Privatecapitalpermittedin
areareservedfor the public
sector
Industriallicensing
abandonedin manysectors
Tariff and non-tariff
barrierslowered

13. Benefits of liberalization
 Increase the foreign investment.
 Increase the foreign exchange reserve.
 Increase in consumption.
 Control overprice.
 Check on corruption.
 Reduction in dependence on external commercialborrowings.

14. LIMITATION OF LIBERLIZATION
Increase in unemployment.
Loss to domestic units.
Increase dependence on foreign nations.
Unbalanceddevelopment.
Increase the imbalances.

16. Privatization
Privatizationmeans transfer of ownershipand management of an enterprisefromthe publicsector to the
privatesector.
Privatizationis opening up of an industrythat has been reserved for public sector to the privatesector.
Privatizationmeans replacing government monopolies withthe competitivepressures of the marketplaceto
encourage efficiency ,quality and innovation in the delivery of good and services.

17. DISINVESTMENT
 Privatizationof PSUs by sellingoff part of the equality(share)to the publicis knownsas
Disinvestment .
 The purposeof Disinvestment is to prove financialto improve financial discipline and to
facilitatemodernization.Private capitaland managerialcapabilitieswouldimprove the
efficiencyof PSUs.
 Government adoptedfollowing twomain methodsfor disinvestment:
 MINORITYSALE: Equityis offeredto investorsthroughdomesticpublicissue.The govt minority
share to private persons . The management controlis not transferred.
 StrategicSale : Govtsells majorityshare above51%to theprivate sector.

18. MEASURES ADOPT FOR PRIVATIZATION
Contractions of publicsectors.
Sales shares of publicsectors to the privatesector.
Sickpublicsector industries.
Memorandumof Understanding.
National renewal fund.

19. ADVANTAGES OF PRIVATIZATION
 Increasein efficiency.
 Professionalmanagement.
 Increasein competition.
 Inlinewithinternationaltrends.
 ReductioninpoliticalInterference.
 Encourageto newinnovations.
 Increasetheindustrialgrowth.
 Increasetheforeigninvestment.
 Reductioninpublicsector.

20. LIMITATIONS OF PRIVATIZATION
Industrial sickness.
Lack of welfare.
Class struggle.
Increases in inequality.
Opposition by employees.
Political pressure.
Increase in unemployment.
Ignores the weaker sections.

21. SUCCESSFUL PRIVATIZATIONS IN INDIA
Large jute machinery company limited(LJMC) {Gross turnover pre-privatization = Rs. 6 million
(April-June 2000),post-privatization = Rs. 24 million (July-September 2000)}
Modern food industries limited (MFIL) {Share value went up FromRs 2138 on 30th Dec . (prior
to scale) to Rs. 3247 on 25th Feb (post scale) .}
Pardeep phosphates limited (PPL) {net profit:

23. GLOBALIZATION
it means that opening up of the economy for foreigndirect investment by liberalizing the rules and
regulations and by creating favourable socio-economic and political climatefor global business.
Opening and planning to extendbusiness throughoutthe world.
Buying and selling goodsand services fromany countries in the world.

24. ECONOMIC
GLOBALIZATION
KNOWLEDGE
INCREASEIN NETWORK
DECRESASEIN TRANSACTION
COST
THEEMERGENCEOF
ECONOMY
%
TRADE
THEABOLISHMENTOF
CUSTOMSANDDUTIES
THEINCREASEIN THE
INALLIENCE OF WTO
THEINCREASEIN THE
OPENNESSOF WORLD
ECONOMY
FINANCE
THEINTEGRATIONOF
FINANCIALMARKETS
THELIBERALIZATIONOF
CAPITALMARKETS
MOVEMENT OF LABOUR
THE INCREASING ASYMMETRY
BETWEEN APITAL AND LABOUR
RELATIVELY LOW MOBILIZATION
CAPACITY OF LABOUR FORCE

25. MEASURES ADOPT FOR GLOBALIZATION
Increase the foreign investment .
Partial convertibility of Indian Rupee.
Foreign trade policy.
Reductionof tariffs.
Export promotions.
Freedomof repatriate.

27. POSITIVE EFFECT OF GLOBALIZATION
 Increase in foreign trade.
 Increase in foreign investment.
 Foreign directinvestment.
 Increase in foreigncollaboration.
 Increasesin foreignexchangecollaboration.
 Expansionof market.
 Technological development.
 Brand development.
 Development of service sector.
 Development of capital market.
 Increase in employment.
 Improvement in standardof living.

28. NEGATIVE EFFECT OF GLOBALIZATION
Loss of domestic industries.
Unemployment.
Exploitation of labour.
Demonstration effect.
Increase in inequalities.
Dominance of foreign institutions.

29. MAIN ORGANIZATIONS FACILITATING
GLOBALIZATION
 Someof theinternationalorganizationswhichfacilitatetheprocessof
globalizations:
 InternationalMonetaryFunds(IMF)
 WorldBank
 WorldTradeOrganization(WTO)

30. CONCLUSION

31. On the whole world it can be concluded that changes across the Euro, USA and
other countries have significantly changed the Indian economy .
India has realized that its business can’t survive without focusing on changes in
other countries.
 Indian economy has become a major economy of the world and a significant
trading partner.
 In the new era, Indian is looking at the potential of the new products.

32. Indianeconomy has made rapidstrides in the process of globalisation.
Globalizationin increasing the integrationof national markets and the interdependence of countries world
wide for a wide range of goods, services, and commodities.
The most important lessonthat we must learnfromthe crises is that we must be self-reliant.
Indiantrade reformprogramme resultedin strong economic growthin the globalization age.
In particular, different decisionare to redress the fiscal imbalance, by reducing subsides, completing the
processof tariff and tax reform, and stepping-upprivatization of state-ownedenterprises.
theeffort are neededto balance the trade and consider expansionof trade in other countries of theworld.

33. Bibliography
WEB SITES :-
www.wikepedia.com
www.brainly.com
www.youtube.com