KMC COLLEGE OF LAW,

TIRUPUR

ASSIGNMENT

SUBJECT : INDIAN ECONOMY

SUBJECT CODE : FA2C

ASSIGNMENT TOPIC : LIBERALIZATION- PRIVATIZATION-

DEVALUTION

ASSIGNMENT NUMBER : 01

NAME : SABARISHAA.G.R

COURSE : 1ST YEAR B.A.LLB

DATE OF ISSSUE OF ASSIGNMENT : 12.02.2024

DATE OF SUBMISSION : 24.02.2024

SUBMITTED TO - PROF. KRISHNAN.R

SUBMITTED BY ,

NAME : SABARISHAA.G.R

BATCH : 2023- 2028

COURSE : B.A.LLB

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 LIBERALIZATION – PRIVATIZATION – DEVALUTION

Table of Contents
Objective of the study:........................................................................................................................2

Introduction:........................................................................................................................................2

Review of literature:............................................................................................................................3

History of the study:............................................................................................................................3

Analysis of the study:..........................................................................................................................3

Conclusion:..........................................................................................................................................4

Bibliography:.......................................................................................................................................4

Webliography:.......................................................................................................................................4

Objective of the study:

The study of liberalization, privatization and demonetisation covers the economic, political
and social implications of these policies. Researchers can study the impact of market
dynamics, foreign investment, employment patterns and income distribution. Additionally,
political effects, changes in governance structures and public sentiment are important areas of
study.The impact on various sectors like banking, industry and agriculture and overall
macroeconomic stability is interesting. Assessing the success or challenges in achieving the
goals of liberalization, privatization and demonetization is important for a comprehensive
understanding of their impacts on a country's economy.

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Introduction:

Economic policies such as liberalization, privatization and demonetisation are often

implemented to stimulate growth and competitiveness. Liberalization refers to the reduction
of government restrictions on various economic activities and the promotion of free market
policies. Privatization refers to the transfer of state-owned enterprises to private enterprises to
improve efficiency and competitiveness. Devaluation refers to the deliberate lowering of the
value of a country's currency, usually to promote exports by making goods more affordable in
the international market. These policies are often interconnected strategies aimed at
enhancing economic performance and global competitiveness.

Review of literature:
Bhagwati's work presents an in-depth analysis of India's economic liberalization, providing a
detailed analysis of its impact on trade, growth and overall development. The book combines
theoretical insights with empirical evidence, making it a valuable source for understanding
the complexities of economic liberalization (BHAGWATI, 1993)

Williamson's seminal work highlights the role of economic institutions, including

privatization, in the creation of capitalism. The book presents a strong theoretical framework
that discusses how privatization affects efficiency, governance and market dynamics. A
fundamental text for anyone interested in the relationship between institutions and economic
systems. (WILLIAMSON, 1985)

Krugman's study of exchange rate volatility includes a detailed analysis of devaluation. The
book explores the causes and consequences of currency devaluation, highlighting its impact
on trade, inflation and overall economic stability. Krugman's accessible writing style makes
complex economic concepts accessible to a wide audience. (KRUGMAN, 1988)

History of the study:

Liberalization: 1960s and 1970s: Early discussions of liberalization began, focusing on
reducing government controls on economic activities. 1980s and 1990s: Many countries

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adopted liberalization policies, opening markets, removing trade barriers, and encouraging
foreign investment.

Privatization: 1980s–1990s: A global trend toward privatization emerged as governments

disinvested state-owned enterprises to increase efficiency and encourage private sector
participation. Examples: Britain's privatization of state-owned industries under Margaret
Thatcher and the broader global movement toward market-oriented reforms.

Devaluation: 1970s–1980s: Devaluation became a strategy for countries facing balance of

payments issues or currency instability. Example: Many Latin American and Asian countries
devalued their currencies during economic crises to boost exports and correct trade
imbalances.

Analysis of the study:

On my perspective liberalization, privatization and devaluation reforms initiated in the early
1990s have had a profound impact on the Indian economy. Liberalization eliminated trade
barriers, attracted foreign investment and promoted competition. Privatization improved
efficiency and management practices by reducing state control. The purpose of devaluation of
the Indian rupee is to increase export competitiveness. Collectively, these measures boosted
GDP growth and transformed India into a globally integrated economy. However, challenges
emerged, such as rising income inequality and regional disparities. While the service sector
flourished, agriculture faced constraints. The reforms created a dynamic economic landscape
with increased foreign investment and global participation. Balancing these market-oriented
changes with social inclusion remains a key challenge for policymakers driving India's
economic trajectory.

Conclusion:
In conclusion, the historical trajectory of liberalization, privatization, and demonetization
reflects a global shift toward market-oriented economic policies. Although these reforms are
intended to stimulate economic growth, attract foreign investment, and increase efficiency,
their impact has been mixed. Success stories include improved economic performance in
some countries, but challenges such as income inequality and social inequality highlight the
need for careful implementation and consideration of broader social impacts. There is an
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ongoing debate about weighing the advantages and potential disadvantages of a liberalized
and privatized economy, emphasizing the importance of a balanced and contextual approach
to economic reform.

Bibliography:
HAGWATI, J. (1993). INDIA IN TRANSITION:FREEING THE ECONOMY. Clarendon Press.

KRUGMAN, P. (1988). EXCHANGE-RATE INSTABILITY.

WILLIAMSON, O. E. (1985). THE ECONOMIC INSTITUITONS OF CAPITALISM

Webliography:

https://books.google.co.in/books?id=Xj55Qsm-
mRcC&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=onepage&q&f=false

https://www.google.co.in/books/edition/Privatization/9VasAgAAQBAJ?hl=en&gbpv=0

https://www.google.co.in/books/edition/How_Currency_Devaluation_Works/
mMXskrKCDNAC?hl=en&gbpv=1&dq=devaluation&printsec=frontcover

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