Question

Write about positive and negative effects of LPG

Answer 1

) A vibrant economy:

Indian economy has definately become a more vibrant economy . Overall level of economic activity has definately picked up after the introduction of the policies of liberalisation , privatisation and globalisation . Results are evident in terms of an impressive increase in the growth rate of GDP . Currently , the growth rate of GDP is estimated to be more than 8 per cent .

2) A stimulant to industrial production:

LPG policies have worked as a great stimulant to industrial production in the Indian economy . Presently , industrial production is hovering around 10 percent which is a big jump from the pre-1991 level . It is only after LPG Policies , that it industry in india has become the point of discussion throughout the world.

3) A check on fiscal deficit:

Mounting fiscal deficit has been a serious threat to the process of invesment in the indian economy . it was as high as 8.5 percent prior to 1991 . thanks to the LPG policies , there has been a significant increase in government revenue . Consequently , fiscal deficit has been contained to around 5 percent of GDP .  not exactly low but yes lower than before .

4) A check on Inflation:

Owing to greater flow of goods and services in the economy , there has been a check on the rate of inflaton . Till 2007-08 , it ranged between 4-5 percent which is not a serious threat to interest rate structure . It may be noted that high inflation triggers a rise in interest rate structure and accordingly , lower demand for invesnment funds . Accordingly , growth rate is adversely impacted .

5) consumer’s sovereignty:

consumers sovereignty has definitely widened overtime . this is evident from the actual fact that a large kind of goods and services from the various international markets are currently among the simple reach of the consumers . producers are widely responding to the consumers choice and preference . consequently , overall level of expenditure of the households has tended to rise . implying an overall rise in the welfare status of the peopl

Answer 2

Answer: Positive impacts of LPG policy:

- The GDP growth rate can be increased.

- Safety checks on fiscal deficit.

- Motivating industrial production.

Explanation: Negative impacts of LPG policy:

- Agriculture sector can be ignored.

- Uneven growth process.

- Increased rate of consumerism.