The LPG (Liberalization, Privatization, Globalization) policy presented in 1991 aimed to address India's significant fiscal imbalances, inefficiencies, and low growth rates through deregulation and encouraging foreign investment. While the policy led to increased GDP growth, employment, and foreign exchange reserves, it also resulted in drawbacks such as unemployment, dependency on foreign nations, and social inequality. The overall impact of globalization is a mixed bag, offering rapid economic development and consumer benefits, but also leading to challenges like uneven wealth distribution and rising competition.

1. LPG Policy (1991) Presented BY
Shruti Kumari

2. Contents
Liberalisation ( External and Internal)
Extending Privatisation
Globalisation of the Economy

3. Reasons for implementing LPG
Large and growing fiscal imbalances (Gross fiscal deficit rose to
12.1% of the GDP in 1991)
Growing inefficiency in resources
High inflation rate(13.87% in the year 1990-1991)
Low Foreign Exchange Reserve ($1.2 billion in January 1991)
The low annual growth rate of Indian economy stagnated around
3.5% from 1950s – 1980s)
Per capita income averaged 1.3%

4. Liberalisation
Removal of controls for
international trade and investment
Deregulation
Tax reforms

5. The Path Of Liberalisation
 Relief for foreign investors
 Devaluation of Indian rupees
 New industrial Policy
 New trade policy
 Removal of import Restrictions
 Liberalization of NRI remittances
 Freedom to import technology
 Encouraging foreign tie-ups
 MRTP relaxation
 Privatization of public sector

6. Perks
Increase in employment
GDP Growth
Industrial licensing
Increase the foreign investment.
Increase the foreign exchange reserve.
Increase in consumption
Reduction in dependence on external commercial borrowings
Increment in competition

7. Downside
• Loss of domestic units
• Increase in dependence of foreign nation
• Increase in unemployment

8. Privatisation
 Selling of government equity partially or wholly to private parties.
 Disinvestment
 Mergers
 Acquisition

9. Advantages
Increase in efficiency
Reduction in Political Interference
Increased Competition
Reduction in economic burden
Increase in economic growth
Positive impact on financial health of public sectors
Better service to customers

10. Disadvantages
• Lack of social welfare
• Class struggle
• Increase in inequality
• Increase in unemployment
• Exploitation of weaker section

11. Globalisation
Free access to the market
Globally standardised products need to be marketed all over the world
Requires resources ( raw materials, finance , technology etc )
Free mobility of managerial personal and entrepreneurs.
Mergers , takeovers and structural regrouping

12. Blessings of globalisation
Rapid economic development
More Investment
More Employment
Increase efficiency of domestic companies
Consumer at advantage
Inventions and Discoveries
Growth of the agriculture

13. Liability
Rising competition
Uneven wealth distribution
Unemployment
Inflation
Loss to domestic industries

14. PICTURE GALLERY