.Definition: Economic liberalization is a very broad term that usually refers to fewer government regulations and restrictions in the economy in exchange for greater participation of private entities.

V Narsimha Rao and his finance minister Manmohan Singh breakthrough reforms. . the government of P. after India sold 67 tons of gold to the International Monetary Fund (IMF). In 1991.  In the 1980s. The economic liberalization in India refers to ongoing economic reforms in India that started in 1991. Prime Minister Rajiv Gandhi initiated some reforms.

although no party has yet tried to take on powerful lobbies such as the trade unions and farmers.  The main objective of the government was to transform the economic system from socialism to capitalism so as to achieve high economic growth . or contentious issues such as reforming labor laws and reducing agricultural subsidies. irrespective of the ruling party. The overall direction of liberalization has since remained the same.

 Liberalization in banking sector .  Liberalization in taxation policy.  Liberalization of export and import transactions.  Freedom to import technology.  Freedom to import the capital goods and raw material.  Concession from Monopolies Act.  Freedom for expansion and production to industries  Increase in the investment limit of the small industries.  Liberalization in capital markets. Liberalization for industrial licensing.

 Control over price.  Check on corruption. .  Reduction in dependence on external commercial borrowings.  Increase the foreign exchange reserve.  Increase in consumption. Increase the foreign investment.

. Increase dependence on foreign nations Unbalanced development Increase the imbalances.‡ ‡ ‡ ‡ Increase in unemployment. Loss to domestic units.


transfers the productive activity from the public sector to the private sector. are now transferred to private hands. Privatization is the process by which the govt.Definition:  Privatization is the process whereby activities of enterprise once owned & operated by the govt. .  In economic terms.

Drucker who used the term first in his famous book called The Age Of Discontinuity .  Later country after country fell in line with Great Britain & moved towards Privatisation .F.  This was further given a more practical shape by Margaret Thatcher PM of Great Britain. The history of privatization is 10-15 years old.  The word privatization made an entry way back in the 60 s.  The credit of inventing the word goes to Peter.

 Privatization was introduced mainly for improving the efficiency in PSU s  It is characterized by much better results in terms of cost and quality of service. monopolies with competitive pressures of the marketplace to encourage efficiency. quality & innovation in delivery of goods & services. Privatization is receiving much attention in business. and academic circles on a global platform.  It replaces govt. govt. .

 Reducing the administrative burden on the state. Improve the performance of PSUs to lessen the financial burden on taxpayers.  Popularization of the private sectors.  Generating revenues for state. Sector investments from both domestic & private sources.  Aim at increasing the size and dynamism of private sector.  Encouraging & facilitating pvt. .

 Contraction of public sectors  Sales of shares of public sectors to the private sector.  National renewal fund .  Sick public sectors industries.  Memorandum of understanding.

Encouragement to new innovations. Increase in efficiency. Reduction in economic burden of Govt. Increase in responsibility. Increase the industrial growth. Reduction in political interference. Increase in competition In line with international trends. Reduction in public sectors . Increase the foreign investment.  Professional management.

Lack of welfare. Problem of financing. Class struggle. Increase in unemployment. Opposition by employees. Increase in inequality. Ignores the weaker sections. Ignores the national importance . Political pressure.Industrial sickness.


Def:  Globalization describes an ongoing process by which regional economies. and cultures have become integrated through a globe-spanning network of exchange.  Globalization integration of different economies & societies across the world and has many dimensions mainly: ‡ Economic ‡ Social ‡ Political ‡ Cultural . societies.

Depending upon the scale of integration globalization takes place @ following levels:  Globalization at the world level  Globalization at level of a specific country  Globalization at level of a specific industry  Globalization at level of a specific company .

 Minimize the importance of national boundaries and views the globe as one market.  Rapid growth in international financial and trade transactions  Surge in foreign direct investments  Diffusion of technologies & ideas thru rapid extension of globalized transportation & communication system.  Increases economic interdependence among different countries.  Helps accessing optimal locations for the of various activities. .

 Technological advances. .  Changing demographics of countries.  Regional trading blocks.  Over-capacity & over-production.  Emerging forms of commercial organization. Dismantling the barriers to international economic transactions.  Political factors.  The intellectual rationale.  Declining trade & investment barriers.


 Foreign trade policy.  Export promotion. Partial convertibility of Indian rupee. .  Reduction In tariffs.  Freedom to repatriate.

 Expansion of market.  Increase in employment.  Increase in foreign investment.  Reduction in brain drain.  Improvement in standard of living .  Brand development.  Development of capital market. Increase in foreign trade.  Increase in foreign exchange reserves.  Foreign direct investment(FDI).  Increase in foreign collaboration.  Development of services sectors.  Technological development.

 Unemployment.  Exploitation of labour.  Increase in inequalities.  Demonstration effect.  Dominance of foreign institutions . Loss of domestic industries.

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