New Economic

Policy
LPG
FDI
FII
Group Members-
MUDIT SAXENA Guided by-
BHANU PRATAP Bhavya ma'am
AKSHAT JOHRI
PRACHI SHARMA
SHRINKHALA SHARMA
 INTRODUCTION
July 1991, India has taken a series of measures to structure the
economy and improve the BOP position. The new economic
policy introduced changes in several areas. The policy have
some salient features like:-
1- Liberalization ( internal & external ).
2- Extending Privatization.
3- Globalization of the economy.
Which are known as ‘LPG’[ Liberalization, Privatization and
Globalization ]
Reasons for implementing LPG:-
 Excess of consumption and expenditure over
revenue resulting in heavy govt. borrowings.
 Mismanagement of the firm and the economy.
 Increase in losses for public sector enterprises.
 Low foreign exchange reserve.
 Inflation.
 Over protection to industries.
 Liberalization
Liberalization is a very broad term that usually refers to
fewer government regulations and restrictions in the
economy.
Liberalization refers to the relaxation of the previous
government restriction usually in area of social and
economic policies. When government liberalized trade,
it means it has removed the tariff, subsidies and other
restriction on the flow of goods and services.
The Path Of Liberalization
 Relief for foreign investors.
 New industries policy.
 New trade policy.
 Removal of import restrictions.
 Freedom to import technology.
 Encouraging foreign tie-ups.
 MRTP relaxation.
Advantages of Liberalization
 Industrial licensing.
 Increase the foreign exchange reserve.
 Increase in consumption and control over price.
 Check on corruption.
 Reducing in dependence on external commercial
borrowings.
 Privatization
Privatization means transfer of ownership and/or
management of an enterprise from the public
sector to the private sector. It also means the
withdrawal of the state from an industry or
sector partially or fully.
Privatization is opening up of an industry that has
been reserved for public sector to private sector.
 The Path Of Privatization
Government companies can be converted
into private companies in two ways:-
1. By disinvestment.
2. By withdrawal of governmental
ownership and management of
public sector companies.
 Advantages of Privatization
 Improve the financial situation of the government.
 Reduce the workload of public sector companies.
 Raise funds from disinvestment.
 Increase the efficiency of government organizations.
 Create healthy competition in the society.
 Encouraging foreign direct investments (FDI) in
India.
 Globalization
Globalization implies integration of the economy
of the country with the rest of the world economy
and opening up of the economy for foreign
direct investment by liberalization the rules and
regulations and by creating favorable socio-
economic and political climate for global business.
Foreign market entry strategies
 Exporting
 Licensing/Franchising
 Joint venturing
 Merger and acquisition
 Strategic alliance
 Contract manufacturing
 Pros of Globalization
 Free flow of capital and increase in the total capital
employed.
 Free flow of technology.
 Increase in industrialization.
 Spread of production facilities throughout the globe.
 Balanced development of world economies.
 Increase in jobs and income.
 Balanced human development.
 FDI
Foreign direct investment (FDI) is an investment in a
business by an investor from another country for which
the foreign investor has control over the company purchased.

FII
Foreign institutional investors (FIIs) are those institutional
investors which invest in the assets belonging to a different
country other than where these organizations are based.
 E-COMMERCE
E-Commerce or Electronic Commerce means buying and
selling of goods, products, or services over the internet.
These services provided online over the internet network.
Transaction of money, funds, and data are also considered
as E-commerce. These business transactions can be done
in four ways: Business to business (B2B), Business to
Customer (B2C), Customer to Customer (C2C), Customer
to Business (C2B). The standard definition of E-commerce
is a commercial transaction which is happened over the
internet.
1. Business to Business
This is business to business transactions. Here the companies
are doing business with each other. The final consumer is not
involved. So the online transactions only involve the retailers,
wholesalers, manufacturers etc.
2. Business to Consumer
Business to consumer. Here the company will sell their goods
and/or services directly to the consumer. The consumer can
browse their websites and look at products, pictures, read
reviews. Then they place their order and the company ships
the goods directly to them.
3. Consumer to Consumer
Consumer to consumer, where the consumers are in direct
contact with each other. No company is involved. It helps
people sell their personal goods and assets directly to an
interested party. Usually, goods traded are cars, bikes etc.
4. Consumer to business
This is the reverse of B2C, it is a consumer to business. So the
consumer provides a good or some service to the company. Say
for example IT freelancer who demos and sells his software to
a company. This would be a C2B transaction.
ADVANTAGES OF E-COMERCE
Among the top advantages for starting an e-
commerce business are eliminating geographical
limitations, gaining new customers with search
engine visibility, lower costs for maintenance
and rent, and higher capacity of goods and
deliveries.
 BUSINESS-STARTUPS
A startup is a young company founded by one or
more entrepreneurs in order to develop a unique
product or service and bring it to market. By its
nature, the typical startup tends to be a shoestring
operation, with initial funding from the founders
or their families.
 KEY TAKEAWAYS
A startup is an entrepreneurial venture in search of
enough financial backing to get off the ground.

The first challenge for a startup is to prove the validity

of the concept to potential lenders and investors.

Startups are always risky propositions but potential

investors have several approaches to determining their
value.
 Startup or Entrepreneur:
What is the Difference?
Startup has NO: Entrepreneur has:
1. Marketplace 1. Marketplace
2. Customers 2. Customers
3. Customers inquiries 3. Customers inquiries
4. Initial capital. 4. Initial capital.
THANK YOU