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It¶s a Economic structural reforms or a new economic policy made by Indian government in 1991 for stabilizing Indian economy and for making economy as fastest growing economy and globally competitive. ..

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In 1990-91 Government was very low of cash. Foreign currency reserves had plummeted to almost $1 billion. Inflation had roared to an annual rate of 17 percent. Fiscal deficit was very high and had become unsustainable. Foreign investors and NRIs had lost confidence in Indian Economy.

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L :- Liberalization. P :- privatization. G :- Globalization.

Liberalization

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To put end on rules / Regulation to control economy Open up various sectors of Economy. 

   

End of license Raj. Financial Sector Reformed. Tax Reform. Forex Reform. Trade Investment Reform.

Privatization

Privatization of Public Sector Undertaking. ` How?  Disinvestment  Selling PSU¶s equity to public
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Benefit
1. Increased financial discipline 2. Modernization 3. Increased performance of PSU by i. Private capital ii. Managerial techniques 4. FDI incoming

Problem
1. Income generated from Disinvestment used to fill Revenue deficit 2. Privatization of PSU instead of making Navaratna a Global Player.

Globalization

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The term globalization refers to the integration of economies of the world through uninhibited trade and financial flows, as also through mutual exchange of technology and knowledge. Ideally, it also contains free inter-country movement of labor. 

Opening

up the economy to foreign direct investment.  Removing constraints and obstacles to the entry of MNCs in India.  Allowing Indian companies to enter into foreign collaborations and to set up joint venture.  The removal of quantitative restrictions on imports.

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The rate of growth of Gross Domestic Rate of India is increasing. The foreign exchange Reserve is increasing every year. The cumulative FDI is increasing every year. India controls at the present 45 per cent of the global outsourcing market with an estimated income of $ 50 billion.

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In respect of Market Capitalization India is in the fourth position $ 894 billion after the US ($ 17,000 billion), Japan ($ 4800 billion) and China ($ 1000). India is expected to soon cross the trillion dollar mark. As per the Forbes list for 2007, the number of billionaires of India has risen to 40 (from 36 last year)more than those of Japan (24), China (17), France (14) and Italy (14) this year.

Globalization is facilitated via WTO

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WTO :- World Trade Organization. Formation :- January 1, 1995 Headquarters :- Geneva, Switzerland Membership:- 153 member states Official languages:- English, French, Spanish Director-General :-Pascal Lamy Budget :- 182 million USD in 2009. Staff :- 625.

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Deals with regulation of trade between participating countries. It provides a framework for negotiating and formalizing trade agreements, and a dispute resolution process aimed at enforcing participants adherence to WTO agreements which are signed by representatives of member governments and ratified by their parliaments.

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The WTO has 153 members, representing more than 97% of total world trade and 30 observers, most seeking membership. The WTO is governed by a ministerial conference, meeting every two years; a general council, which implements the conference's policy decisions and is responsible for day-to-day administration; and a director-general, who is appointed by the ministerial conference.

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It oversees the implementation, administration and operation of the covered agreements. It provides a forum for negotiations and for settling disputes. WTO's duty to review and propagate the national trade policies, and to ensure the coherence and transparency of trade policies through surveillance in global economic policy-making.

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Another priority of the WTO is the assistance of developing, least-developed and low-income countries in transition to adjust to WTO rules and disciplines through technical cooperation and training. The WTO is also a center of economic research and analysis: regular assessments of the global trade picture in its annual publications and research reports on specific topics are produced by the organization.

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The process of becoming a WTO member is unique to each applicant country, and the terms of accession are dependent upon the country's stage of economic development and current trade regime.[ The process takes about five years, on average, but it can last more if the country is less than fully committed to the process or if political issues interfere.

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The WTO launched the current round of negotiations, the Doha Development Agenda (DDA) or Doha Round, at the fourth ministerial conference in Doha, Qatar in November 2001. To Enhance equitable participation of poorer countries which represent a majority of the world's population.

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Agreement on Agriculture (AoA) General Agreement on Trade in Services (GATS). Trade-Related Aspects of Intellectual Property Rights Agreement (TRIPs) Sanitary and Phyto-Sanitary (SPS) Agreement Agreement on Technical Barriers to Trade (TBT) Agreement on Customs Valuation

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Major volume of International trade between Developed Nations. Critics claim that the issues of labor relations and environment are steadfastly ignored.

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Before LPG we were doing 'Import Substitution' strategy. Result of Import Substitution strategy was that we were not importing any luxury electronic items , walkman, VHS players, Stereos, cars etc from Japan, Taiwan, America, etc

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After LPG, our market was flooded with cheap electronic goodies. Our trade relations with Japan, Singapore, ASEAN, & America improved. Attracting foreign investors.

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Today you're able to surf internet, buy computer, mobile phones. Have dozens of toothpastes, cars, bikes to select from...

all that thanks to LPG.