Liberalization, Privatization and Globalization (LPG)

PROJECT ON

Indian economy in deep crisis (July 1991).

Inflation roared to an annual rate of 17 percent.

Unforeseeable changes in the economies of other nations.

INTRODUCTION

Relaxation of rules and regulations

P. V. Narasimha Rao and his finance minister Manmohan Singh started breakthrough reforms.

As of 2009, about 300 million people have escaped extreme poverty.

LIBERALIZATION

High tariffs on foreign trade.

High restrictions on licensing.

Inconvertible currency(rupee)

Encouraging the domestic industries.

PRE-LIBERALIZATION POLICIES

The low annual growth rate

Only four or five licences would be given for steel, power and communications.

State-owned enterprises made large losses.

Corruption flourished under this system

IMPACT

Industrial licensing 

Abolishing the Controller of Capital Issues

Introducing the SEBI Act

Reduction of Tariffs

Encouraging FDI

NARASIMHA RAO GOVERNMENT (1991-1996)

in FDI, FII and Portfolio investment

In GDP per capita (1.5 to 7.5)

IMPACT OF REFORMS

Promotion of free trade

Elimination of tariffs

Globalizing the economy

GLOBALIZATION

Devaluation

Disinvestment

Allowing FDI

NRI Scheme

STEPS TAKEN TO GLOBALIZE INDIAN ECONOMY

International market for companies,

Wide range of products for consumers.

Increase in flow of investments

Faster flow of information between countries

Technological development 

MERITS OF GLOBALIZATION

Outsourcing of jobs

Adverse effects of MNC’s ruling the globe

Colonization

DEMERITS OF GLOBALIZATION 

GDP increased to 9.7%

No improvement in agriculture.

Improvement in service sector

(employment generation)

SUMMARY

Transferring ownership of the

business, enterprise, agency or public service

  Privatizing a publicly traded stock.

PRIVATIZATION

Competitive environment

Indian economy is booming

Better growth of GDP

WHY WE NEED PRIVATIZATION

Efficiency and growth

Utilization of Labour and Capital

Market discipline

GOVERNMENT HAS FAILED IN..

Thank you