LIBERALISTION, PRIVATISATION, GLOBALIZATION

By: Ajeet Kumar Pandey After Independent in 1947 Indian government have main problem to develop our economic. The Growth Economics conditions of India in that time were not very good, because we did not have proper resources for the development, not in terms of natural resources but in terms of financial and industrial development. At that time India need the path of economics planning and for that we adopt Five Year Plan concept of which we take from Russia and feel that it will provide as fast development like Russia, under the view of the socialistic pattern society. And India had practiced a number of restrictions ever since the introduction of the first industrial policy resolution in 1948. Liberalization: As we know that those period were known as License Raj. As a result of the restriction in the past, Indias performance in the global market has been very dismal; we have never reached even the 1% in the global market. We have vast natural resources with high efficiency labor, but after all this we were still contributing with 0.53% till 1992. There were many problems in liberalization, but before that the definition of liberalization: It is defined as making economics free to enter in the market and establish there venture in the country. IMPACT BEFORE LIBERLISATION (1)

The low annual growth rate of the economy of India before 1980, which stagnated around 3.5% from 1950s to 1980s, while per capita income averaged 1.3%. At the same time, Pakistan grew by 5%, Indonesia by 9%, Thailand by 9%, South Korea by 10% and in Taiwan by 12%.

Only four or five licenses would be given for steel, power and communications. License owners built up huge powerful empires A huge public sector emerged. State-owned enterprises made large losses. Infrastructure investment was poor because of the public sector monopoly. License Raj established the "irresponsible, self-perpetuating bureaucracy that still exists throughout much of the country" and corruption flourished under this system

After liberalization India is in second world of development and become the 7 largest economies which contributed 1.3 trillion in the worlds GDP. Dr. Manmohan Singh our former finance minister open the way of free economy in our country which leads to the great development of our country. PRIVATIZATION Privatization is defined as when the control of economic is sifted from public to a private hand then the situation is known as privatization. India is leading towards privatization from government raj. As a result it leads in the development of country 500 faster than previous. Now India is in the situation of world fastest developing economy and may be chance that India will be at top till 2050. GLOBALIZATION Globalization describes the process by which regional economies, societies, and cultures have become integrated through a global network of communication, transportation, and trade. The term is sometimes used to refer specifically to economic globalization: the integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration, and the spread of technology. However, globalization is usually recognized as being driven by

a combination of economic, technological, sociocultural, political, and biological factors.(2) LPG Model of Development. (a) This has a very narrow focus since it largely concentrates on the corporate sector which accounts for only 10 percent of GDP. (b) The model bypasses agriculture and agro based industries which are a major source of generation of employment for the masses. It did not delineate a concrete policy to develop infrastructure. Financial and technological support, particularly the infrastructural needs of agro-exports. (c) By permitting free entry of the multinational corporations in the consumer goods sector, the model has hit the interests of the small and medium sector engaged in the production of consumer goods. There is danger of labor displacement in the small sector if unbridled entry of MNCs is continued. (d) By facilitating imports, the Government has opened the import window too wide and consequently, the benefits of rising exports are more than offset by much greater rise in imports leading to a larger trade gap. (e) Finally the model emphasizes a capital intensive pattern of development and there are serious apprehensions about its employment-potential. It is being made out that it may cause unemployment in the short run but will take care

1) Book Dreaming with BRIC 2050 by Goldman sach

2)

Bhagwati, Jagdish (2004). In Defense of Globalization. Oxford, New York: Oxford University Press.