Tamilnadu Samacheer Kalvi 12th Commerce Notes Chapter 20 Liberalization, Privatization and Globalization Notes
→ India agreed to the conditions of World Bank and IMF and announced New Economic Policy (NEP) which consists of wide range of economic reforms. This new set of economic reforms is commonly known as the LPG or Liberalisation, Privatisation and Globalisation.
→ There are three dimensions of New Economic Policy. They are explained below: Liberalization Privatization, Globalization.
→ Liberalization refers to laws or rules being liberalized, or relaxed, by a government.
→ The government of India has adopted several measures of liberalization. They are:
(i) Liberalization for industrial licensing
(ii) Freedom for expansion and production to industries
(iii) Increase in the investment limit of the small industries
(iv) Foreign Exchange reforms
(v) Liberalization of export and import transactions
→ Privatization is the incidence or process of transferring ownership of a business enterprise, agency or public service from the government to the private sector.
→ Forms of Privatization:
(i) Contraction (minimisation) of public sectors
(ii) Sales of shares of public sectors to the private sector
(iii) Memorandum of Understanding
(iv) Disinvestment in PSUs
→ Globalisation means the interaction and integration of the domestic economy with the rest of the world with regard to foreign investment, trade, production and financial matters.
→ Forms of Globalization: (i) Foreign trade policy (ii) Export promotion (iii) Freedom to repatriate (iv) Reduction in tariffs (v) Encouraging open competition:
→ Highlights of the LPG [Liberalisation, Privatisation and Globalisation Policy]:
(i) Introduction of new Foreign Trade Agreements
(ii) Foreign Investment (FDI and FII)
(iii) MRTP Act, 1969 (Amended)
(iv) Deregulation
(v) Opportunities for overseas trade
(vi) Steps to regulate inflation
(v/i) Tax reforms
(viii) Abolition of License