The document discusses India's adoption of liberalization, privatization, and globalization (LPG) policies in 1991 to address economic issues. It overviews the reasons for implementing LPG, which included excess consumption over revenue, public sector losses, and low foreign exchange reserves. Liberalization reduced regulations to increase private participation and investment. Privatization transferred public enterprises to private ownership. Globalization integrated India's economy internationally through foreign investment. The policies aimed to boost foreign investment and exchange while increasing competition, but could also increase unemployment and inequality.

1. LIBERALISATION
PRIVATISATION
GLOBALISATION

2. INTRODUCTION
July 1991,India has taken a series of measures to structure the
economy and improve the BOP position. The new economic policy
introduced changes in several areas.
The policies are: -
1.Liberlisation
2.Privatization
3.Globalisation
Which are known as “ LPG ”. (liberalization privatization globalization)

3. Reasons for implementing LPG :
 Excess of consumption and expenditure over revenue
 For protection to Indian industries.
 Mismanagement of the firm in the economy.
 Increase in losses for public sector enterprises.
 Various distortion like poor technological development, shortage of foreign
exchange
 Low foreign exchange reserves.
 Inflation

4. LIBERALIZATION
 Liberalization refers that limited
government regulations and restrictions
in the economy in exchange for more
participation of private firms.

5. Measures taken for liberalization
• Liberalization for industrial licensing
• Freedom for expansion and production to industries
• Increase in the investment limit of the small industries
• Freedom to import the capital goods and raw material
• Freedom to import technology
• Liberalization of export and import transactions
• Liberalization in taxation policy
• Liberalization in banking sector

6. ADVANTAGE
 Increase 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.

7. DISADVANTAGE
• Increase in unemployment.
• Loss to domestic units.
• Increase dependence on foreign nations
• Unbalanced development

8. PRIVATIZATION
 Privatization means transfer of ownership of an
enterprise from the public sector to the private sector .
 In privatization most of the role has play by private
sector.

9. ADVANTAGE
 Privatization helps to reduce the burden on Govt.
 It will help profit making public sector unit & modernize 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.
 It Encourage the new innovations without any restrictions.
 Small Industries can grow more and more.

10. DISADVANTAGE
• Lack of welfare.
• Increase in inequality
• Problem of financing.
• Problem in unemployment.
• Ignores the weaker sections & national
importance

11. GLOBALIZATION
 Globalization means integration of the economy of
the country with the rest of the world economy and
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.

12. ADVANTAGE
 Increase in Trade in Goods and Services
 Free flow of technology
 Increase in industrialization
 Increase in production and higher standard of living.
 Commodities at lower price with high quality
 Increase in jobs and incomes
 Development of infrastructure

13. DISADVANTAGE
 Loss of domestic industries
 Decline in income
o Transfer of natural resources
 Widening gap between rich and
poor

14. THANK YOU