3. • Liberalization, privatization and
globalization was introduced in year 1991
through New Economic Policy.
• This policy has been introduced to get rid
off problems related to strict regulations
and pubic sector which resulted into
bureaucratization, overstaffing,
corruption related problems.
• Another significant reason for
implementing this policy was insufficient
foreign reserve in kitty of Indian
Government and pressure of
International agencies for opening up
Indian markets for outside players.
2 weeks
4. Liberalization
• Liberalization means to reduce unnecessary
restrictions and controls on business units
imposed by government.
• This resulted procedural simplification and
relaxing trade related activities from
unnecessary government restrictions.
• Therefore it resulted into easing the barriers
created by government through various
means like industrial licensing, import
licensing, price control, control over
production of goods, foreign exchange
control, expansion and investment by large
business houses and foreign investors etc.
5. Features of Liberalization
• Eliminating industrial licensing barriers
• Freedom in price fixation
• Easing the procedures related to international trade
• Reduction in tax rates
• Freedom about the scale of businesses
• Reducing control over foreign exchange rates
6. Privatization
• This refers to providing opportunity
and suitable atmosphere to private
sector for setting up industrial units
previously reserved for public sector.
• This enhances the importance of
private sector to achieve better
economic growth.
• It results into transfer of ownership
from government (PSUs) to
Individual citizens (Private sectors).
Private
Sector
7. Features of Privatization
• Increased competition
• Ownership transfer
• More job opportunities
• Effective utilization of resources
8. Globalization
• Globalization means linking the
economy of a country with
economies of other countries by
means of free trade, easy mobility
of labour and capital.
• Globalization refers to joining the
whole world market in one market
like the market of a small village.
9. Features of Globalization
• Latest Technology support
• Transfer of best skill
• Availability of quality products at reasonable
price
• International Competition
11. Favorable implications
• Enhanced competition results in better
products and soothing investment climate
which yields overall infrastructural
development
• Optimum use of resources like land, labour
and capital
• Availability of quality goods at reasonable
prices
• Better quality service to customers
12. • Significant foreign investment
• Less political interference
• Reduced corruption and other malpractices
• Better rate of returns on investment in
businesses than public sector
13. • Better employment opportunities
• Use of latest technology
• Boost in industrial activities
• Composed Global development
• Exchange of beliefs, cultural values and
traditions
14. Unfavorable Implications
• Problems for domestic industries
• Exploitation of employees
• May convert conditions more worse in
underdeveloped countries
• Non-balanced regional development
• Concentration of economic powers in private
hands
15. • Lack of environmental concerns
• Rare control on monopoly
• National sovereignty: under question
• Beneficial for big business houses only
• Chain reaction of financial disturbances
