LiberaLization of india

Introduction of Liberalization in India

The Pre-liberalization Era Prior to 1991

The Post Liberalization Era -- The Present Era.

Why Did it Start.????

In 1991, India Faced a Balance of Payments Crisis.

It had to Pledge its Gold to Foreign Countries. It was a deal with The IMF. Then PM of India, P V Narsimha Rao Knew that It was time for Some Bold Decision.

History of Liberalization in India-:

July 1991,India has taken a series of measures to structure the economy and improve the BOP The new economic policy introduced changes in several areas. The policy have salient feature which are-: 1) 2) 3) Liberalization (internal and external) Extending Privatization Globalization of the economy

Which are known as LPG. (liberalization privatization globalization)

Economic Liberalization in India

It means the process of opening up of the Indian economy to trade and investment with the rest of the world. It means that opening the Door for doing Business to all over the world. Till 1991 India had a import protection policy wherein trade with the rest of the world was limited to exports. Foreign investment was very difficult to come into India due to a bureaucratic framework. After the start of the economic liberalization, India started getting huge capital inflows and it has emerged as the 2nd fastest growing country in the world.

The Policies of Liberalization Included the Following...

Opening the Gate for International Trade and Investment.
Deregulation. (The removal of government controls from an industry or sector, to allow for a free and efficient marketplace). Initiation of Privatization. Tax Reforms. Inflation Controlling Measure.

Impact of Liberalization on Indian Economy-:

Increase in Employment.

Arrival of New Technology or Development of Technology.

Development of Infrastructure. Identity at World Level. Increase Our Currency Value (INR). GDP Growth. Increase Consumption and Adaptation of New Lifestyle. Increment of Competition. Increment in Foreign Investor.

Advantages of liberalization
Development of economy without capital investment.
Increase the foreign investment. Increase the foreign exchange reserve. Increase in consumption and Control over price. Reduction in dependence on external commercial borrowings

Disadvantages of Liberalization
Loss to domestic units. Increase dependence on foreign nations.

Privatization-:
Privatization means transfer of ownership and/or management of an enterprise from the public sector to the private sector .
Privatization is opening up of an industry that has been reserved for public sector to the private sector. Privatization means replacing government monopolies with the competitive pressures of the marketplace to encourage efficiency, quality and innovation in the delivery of goods and services.

Globalization-:
It Means that opening up of the economy for foreign direct investment by liberalizing the rules and regulations and by creating favorable socio-economic and political climate for global business.
Opening and planning to expand business throughout the world. Buying and selling goods and services from/to any countries in the world.

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