Liberalization , Globalization and Privatization are the three main pillars of modern global economy.In the Modern era Economy is one the most important thread which connects the nations across the globe. Need of one nation can be fulfilled by other and vice-versa. Concept of LPG made the whole world a single unit.
What do you mean by Liberalization , Globalization and Privatization ?
Liberalization : It defined as making economy free to enter in the market and establish there venture in the country. Liberalization refers liberal of economy in terms of movements of flow of goods and services within and out of nation. Liberalization promotes the development of any nation.
Privatization : It defined as when the control of economic activities got shifted to private hand instead of public hand . Privatization is necessary for expanding one's economy and enhance the global connectivity. Privatization strengthen the private sectors.
Globalization : It describes the process by which regional economies , societies and cultures have integrated across the globe. Globalization made the whole world as a single unit . Interdependence of one nation on other reduces the barriers of modern era .
Role of LPG (Liberalization , Privatization and Globalization) in Indian Context
The economic liberalization in India initiated in 1991.Before 1991 Indian adopted to close the indian economy to the outside the world. India also operated a system of central planning for the economy, in which firms required licences to invest and develop.At that time most of the industries were under the government control,The labyrinthine bureaucracy often led to absurd restrictions. A Balance of Payments crisis in 1991 pushed the country to near bankruptcy. Value of indian currencies were fallen drastically.
LPG in india is mainly due to the glorious effort of former finance and prime minister of India Mr Manmohan Singh who initiated the economic liberalization of 1991 in India.This Policy of LPG had made various reforms in india like foreign exchange Regulation Act 1973 was repealed and Foreign exchange Management Act was passed. Licencing system was removed and only few industries were kept under the preview of Licencing system.
Highlights of LPG.
Foreign Technology Agreements
MRTP Act, 1969 (Amended)
Beginning of privatization
Opportunities for overseas trade
Steps to regulate inflation
Abolition of License -Permit Raj
Advantage of LPG:
LPG initiate rapid economic growth to raise the standard of living.
Reduced the widespread unemployment and poverty.
India became self-reliant and set up a strong industrial base with emphasis on heavy and basic industries.
Reduce inequalities of income and wealth in india.
LPG help to attract foreign capital and technology to India.
Procedures for imports and exports got simplified.
Removal of restrictions on the movement of goods and services.
LPG help to open and expand the indian markets to the world.
Concept of LPG has changed the status of india. India got its independence in 1947 but the real way of development started since 1991 when india has adopted the LPG model. Till 1990 india stand no where in global market but since 1991 india has progressed alot . Today indian market is one of the most valuable market . Indian economy is one of the fastest growing major economy of the world.India’s growth rate, at 7.4 per cent in 2014, makes it the fastest growing major economy.India is now a $2-trillion economy and it has added $1-trillion in just seven years.World bank has also predicted that within 5 to 7 years indian economy will be the largest economy of the globe.