The document discusses India's New Economic Policy which began in 1991 and included economic liberalization, privatization, and globalization. It overhauled India's socialist-based policies and opened the economy to global markets. Key aspects included liberalizing foreign investment rules, privatizing state-run companies, removing import/export restrictions, and integrating India's economy globally. The effects were both positive, like increased foreign investment and GDP growth, as well as negative, such as rising unemployment and inequality. Businesses had to adapt to increased competition, demanding customers, rapidly changing technology, and reduced public sector support.

2. WHAT IS NEW
ECONOMIC POLICY ?
 It refers to ongoing
economic
liberalisation or
relaxation started
in 1991 of the
countries
economic policies

3. NEW ECONOMIC
POLICY
LIBERALISATION PRIVATISATION GLOBALISATION

5. GLOBALIZATION
Globalization is the system of
interaction among the countries
of the world in order to
develop the global economy.
Globalization refers to the
integration of economics and
societies all over the world.

6. EFFECTS OF GLOBALIZATION
• Improvement of International Trade.
• Technological Progress.
• Increasing Influence of Multinationals.
• Power of the WTO, IMF, and WB.
• Greater Outsourcing of BPO’S.
• Greater Mobility of Human Resources.
• Civil Society.

7. 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

8. POSITIVE EFFECTS
 Increase in foreign
investment
 Increase in
Production
 Technological
advancement
 Increase in GDP
growth rate
NEGATIVE
EFFECTS
 Increase in
Unemployment
 Decrease in Tax
Receipt

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

10. 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

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

12. IMPACT OF GOVERNMENT POLICY ON
BUSINESS AND INDUSTRY

13. GROWTH OF GDP POST
LIBERALISATION

14. IMPACT OF LPG
The LPG policy of the Government
has made significant impact on the
working of the enterprises in
business and industry. Indian
Corporate sector has come to face
a number of challenges due to the
new Government policy.

15. 1. Increasing competition
2. More demanding customers
3. Rapidly changing technological
environment
4. Necessity for change
5. Need for developing human resource
6. Market orientation
7. Loss of budgetary support to the public
sector

16. Increasing competition
…..
As a result of changes in the
rules of industrial licensing and
entry of foreign firms, competition
for Indian firms increased drastically

17. Increased competition in the
market gives the customers a wider
choice and customers have become more
demanding as they are well informed.

18. Rapidly changing technological
environment
Increased competition forces the firms to
develop new ways to survive and grow in the
market. New technologies make it possible to
improve machines, process, products and
services

19. NECESSITY FOR CHANGE
After 1991, the market forces have become
turbulent and the enterprises have to
continuously modify their operations. Lot of
changes occurred in the appearance and mode
of operation of many enterprises.

20. Changes in the economic policies after
1991 necessitated the enterprises to train
their personnel to acquire high
competencies

21. Market Orientation
Business enterprises were compelled to
consider the needs and aspirations of
customers. The new Economic policies
witnessed a shift from product orientation
to market orientation.

22. Loss of budgetary support
to the public sector
The central government’s budgetary
support for financing the public sector
outlays has declined over the
years.Public sector realised that in
order to survive and grow, they have
to improve their efficiency and

23. MULTINATIONAL COMPANIES

24. NEW INDUSTRIAL POLICY OF 1991
Reduced the number of industries under compulsory
licensing to six
Many reserved industries for public sector was
dereserved
Disinvestment in public sector was carried out.
Automatic permission was granted for technology
agreements with foreign companies
FIPB (Foreign Investment Promotion Board was set
up to promote foreign investment
Policy towards foreign capital was liberalized.