Question

Need for liberalization, privatization and globalization of india

Answer 1

In India, all these three are collectively called as economic reforms implemented in 1991 by then Finance Minister Dr. Manmohan Singh.

It was a paradigm shift in India’s economic policy.

1.Liberalization of the economy by ending ‘license Quota Raj’, thereby reducing the red tapism in a significant way. Simply means, one does not have to get a thousand approvals from various government offices for starting a business. It is much more liberalized rules and regulations, a simplified tax regime, and many changes in economic policies which made foreign capital flow and import easier.

2.Privatization is one of the import aspect of this economic reforms. It means privatizing government and public sector industries and organizations on the pretext of increasing productivity, making them optimum efficient and attracting much needed capital influx to these ill functioned, if not dysfunctional, entities.

3.In India, Globalization is always understood in the context of economic reforms of 1991. It is opening up of the local economy to global economy thereby integrating it to the global capital market. It is made possible by relaxing export import policies, allowing Foreign Direct Investment (FDI) in many sectors upto 51% and removing import barriers.