October 10, 2018

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Liberalisation, Privatisation and Globalisation : An Appraisal



Liberalisation, Privatisation and Globalisation : An Appraisal

Liberalisation, Privatisation and Globalisation : An Appraisal

                                                                                        

  • Regulations for Industries before New Economic Policy

 

  1. Licencing
  2. Private sector was not allowed in many industries.
  3. Price fixation for selected industrial products.

 

  • New Economic policy

 

  1. Creating more competent environment.
  2. Includes stabilisation measures and structural reform measures.
  3. Initiation of Liberalisation, Privatisation and Globalisation.

 

  • Measures introduced in Liberalisation

 

  • Measures introduced in Privatisation

 

  1. Government companies can be converted into Private companies with certain conditions.
  2. Given the autonomy to PSU’s to take managerial decisions.
  3. Encouraged FDI.

                                        

  • Outsourcing: Outsourcing is the process of hiring regular service from external sources, mostly from other countries, which was previously provided internally or from within the country (like legal advice, computer service, advertisement, security each provided by respective departments of the company).

 

  • WTO – World Trade Organisation

 

  1. Founded in 1995.
  2. Successor organisation of GATT.
  3. Ensures optimum utilization of world resources.
  4. Removal of tariffs as well as non tariff barriers.
  5. Safeguards the interests of developing countries.
  6. Removal of quantitative restrictions on imports.



 

  • Growth in GDP of India during Economic Reforms

 

 

  • Impact of Economic Reforms

 

Agricultural Sector Industrial Sector Fiscal Policy
Removal of fertilizer subsidy increased cost of production Industrial Growth slowdown Limits on growth of public expenditure
Public Investment was reduced during reform period Decreased demand of domestic industrial products Tax Revenue was decreased
Reduction in import duties of agricultural imports Imports became cheaper Scope for raising revenues from custom duties was curtailed
Removal of minimum support price Infrastructure facilities became inadequate due to investment Negative impact on developmental and welfare expenditures
Increased international competition    
Farmers were adversely affected    



 

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