Impact of Liberalisation, Privatisation & Globalisation

Liberalization Liberalization refers to abolition or loosening of those economic policies, rules, regulation, administrative controls and procedures which impede economic development.

economic liberalization refers to the removal of unnecessary controls and restriction on trade, industry and banking system of the country.

LIBERALISATION

• Liberalization of the economy means to free the economy from direct or physical controls imposed by the Government.

• The various types of controls are as follows:-Industrial licensing system-Price control or financial control on goods-Import license-Foreign exchange control-Restrictions on investment by big business houses

MEASURES FOR LIBERALISATION

• Abolition of Industrial Licensing and Registration.

• Freedom for expansion and production to Industries

• Freedom to import capital goods• Freedom to import technology• Free determination of Interest rate

Rational of LiberalizationRapid industrial developmentOptimum utilisation of resourcesLack of competitive industrial

environmentEncouragement of foreign investmentGeneration of employment opportunitiesAvailability of cheap & superior goodsRaising standard of living

Positive ImpactIncrease in FDIIncrease in foreign exchange reserveIncrease in GDP and industrial growth

rateIncrease in productionCheck on inflationDecline in external debtImport of best technology

Negative ImpactExternal interferenceUnfair competitionDominance of MNCsMass unemploymentIncrease in regional imbalancesConcentration of economic powerAnti poor