Notes

1. Presentation on
“LiberaLization of india”

2.  The Pre-liberalization Era – Prior to 1991
 The Post Liberalization Era -- The Present Era.
Introduction of Liberalization in India
Why Did it Start…….????
 In 1991, India Faced a “Balance of Payments Crisis”.
 It had to Pledge its Gold to Foreign Countries.
 It was a deal with The IMF.
 Then PM of India, P V Narsimha Rao Knew that It was time for Some Bold
Decision.

3. History of Liberalization in India-:
 July 1991,India has taken a series of measures to structure the economy
and improve the BOP
 The new economic policy introduced changes in several areas.
 The policy have salient feature which are-:
1) Liberalization (internal and external)
2) Extending Privatization
3) Globalization of the economy
Which are known as “LPG”. (liberalization privatization globalization)

4. Economic Liberalization in India
 It means the process of opening up of the Indian economy to trade
and investment with the rest of the world.
 It means that opening the Door for doing Business to all over the
world.
 Till 1991 India had a import protection policy wherein trade with the
rest of the world was limited to exports.
 Foreign investment was very difficult to come into India due to a
bureaucratic framework.
 After the start of the economic liberalization, India started getting
huge capital inflows and it has emerged as the 2nd fastest growing
country in the world.

5. The Policies of Liberalization Included the
Following…………………………………...
 Opening the Gate for International Trade and Investment.
 Deregulation. (The removal of government controls from an industry
or sector, to allow for a free and efficient marketplace).
 Initiation of Privatization.
 Tax Reforms.
 Inflation Controlling Measure.

6. Impact of Liberalization on Indian Economy-:
 Increase in Employment.
 Arrival of New Technology or Development of Technology.
 Development of Infrastructure.
 Identity at World Level.
 Increase Our Currency Value (INR).
 GDP Growth.
 Increase Consumption and Adaptation of New Lifestyle.
 Increment of Competition.
 Increment in Foreign Investor.

7. Advantages of liberalization
 Development of economy without capital investment.
 Increase the foreign investment.
 Increase the foreign exchange reserve.
 Increase in consumption and Control over price.
 Reduction in dependence on external commercial borrowings

8. Disadvantages of Liberalization
 Loss to domestic units.
 Increase dependence on foreign nations.

9. Privatization-:
 Privatization means transfer of ownership and/or management
of an enterprise from the public sector to the private sector .
 Privatization is opening up of an industry that has been reserved
for public sector to the private sector.
 Privatization means replacing government monopolies with the
competitive pressures of the marketplace to encourage efficiency,
quality and innovation in the delivery of goods and services.

10. Advantages of Privatization
Privatization helps to reduce the burden on Govt.
It will help profit making public sector unit to modernize
and diversify their business.
It will help in making public sector unit more competitive.
It will help to improving the quality of decision making,
because the decisions are free from any political interference.
Privatization may help in reviving sick units which are the
liability of the public sector.
It Encourage the new innovations without any restrictions.
Industrial growth.
Increase the foreign investment.
Increase in efficiency.

11. Examples of Privatization
Lagan Jute Machinery Company Limited (LJMC)
Videsh Sanchar Nigam Limited (VSNL)
Hindustan Zinc Limited (HZL)
Hotel Corporation Limited of India (HCL)
Bharat Aluminum Company limited (BALCO)

12. Globalization-:
 It Means that opening up of the economy for foreign direct investment by
liberalizing the rules and regulations and by creating favorable socio-economic
and political climate for global business.
 Opening and planning to expand business throughout the world.
 Buying and selling goods and services from/to any countries in the world.

13. Four Parameters in the process of
Globalization-:
Free flow of goods and services
Free flow of capital
Free flow of technology
Free movement of labor

14. Benefits of Globalization-:
1. Access to new technology
2. Reduction of cost of production
3. Growth opportunity in foreign markets
4. Improvement of competitive strength
5. Satisfaction of consumers
Better quality low price goods
6. Increased volume of trade
7. Spin off benefits
Improve their domestic business as well as image of the
country
Earn foreign exchange
Import capital goods and technology

15. Criticism of Globalization-:
1. Dumping of hazardous technology
Export of radiation generating computer waste products and dumping of mercury
residue in poor countries
2. Widening of income inequalities among countries
3. Widening of income inequalities within a country
4. Exploitation of resources of developing countries
5. Dependence on the advanced countries
6. Attack on country’s autonomy
There is a certain amount of sacrifice in the sense of loss of autonomy in formulating
monetary, fiscal and trade policies , so as to attract maximum amount of foreign
investment.

16. Thank You
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