write briefly how a economic reform in India influenced by liberalisation, privatisation and globalisation.
Answers
These three could be better understood if we talk about it in the context of Indian economy. So, lets begin.
Liberalisation :- prior to 1991, Indian Economy was marked by restrictions and isolation. Norms were more stringent in nature. Rules and laws which were aimed at regulating the economic activities became major hurdles in growth and development. To tackle this, Liberalisation was introduced. It simply ended these restrictions and opened up various sectors of the economy. Some of the important measures taken were Industrial sector reforms(deregulation & dereservations of Industrial sectors, abolishment of Licensing, extending industries to pvt. Sectors except few which were more of prime importance, prices were determined by markets), financial sector reforms (reducing the role of RBI from regulator to facilitator i.e. financial sector may take decisions on many matters without consulting the RBI, estd. of pvt. sector banks, Foreign institutional investors were allowed to invest in Indian financial markets), Tax reforms (reduction in taxes on individual income & corporate sector to overcome tax evasions, estd. of common national market for goods and commodities), Foreign exchange reforms (devaluation of rupee w.r.t. foreign currencies to resolve BOP crisis, exchange rates were determined by markets), Trade and Investment reforms (relaxing quantitative restrictions i.e. High tariffs on imports, removal of export duties, abolition of licensing procedures for imports). So,In nutshell, liberalisation means lessening of Rigid laws and giving more flexibility to economy.
Privatisation :- It refers to shedding of ownership or management of a government owned enterprise. Govt. companies are converted into pvt. one in two ways - I) By withdrawal of govt. from ownership and management of public sector companies and, II) Outright sale of public sector companies. Privatisation of the public sector enterprises by selling off part of the equity of PSEs to the public is known as disinvestment. The aim was, to improve financial discipline and facilitate modernisation. The govt. has also made attempts to improve the efficiency of PSUs by giving them autonomy in taking managerial decisions. E.g. Some PSUs have been granted the status of maharatnas, navratnas & miniratnas.
Globalisation :- In general, It means integration of the economy of a country (say; INDIA) with the world economy. It is an outcome of the set of various policies that are intended for transforming the world towards greater interdependence. Globalisation attempts to establish links in such a manner that the happenings in India can be influenced by events happening miles away thus, turning the world into one whole & creating a borderless world. In recent times with the advancement of sci & tech, easy transportation, faster telecommunication, speedy Internet & digital services many Multinational Companies (MNCs) have spread their wings in different part of the world. E.g. Oil and Natural Gas Corporation (ONGC) has projects in 16 countries, Tata Steel, a private company estd. in 1907, one of the top ten global steel companies in the world, have operations in 26 countries and sells its products in around 50 countries. It employs around 50,000 persons in a country. HCL Technologies, one of the top five IT companies in India has offices in 31 countries and employs about 15,000 persons abroad.
Overall, The major aim of LPG reforms were to boost the economy and provide impetus to the growth and development of the country.
That’s all about LPG !!! Hope it helps.
● Credits - MR. VIBHAS JHA (My Economics Teacher).
● Sources referred - NCERT (Class 11th) ‘Indian Economic Development’
