What are the essential features of  a Liberalisation  b Privatisation and Largest Online Education Community

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• A fiscal deficit refers to a situation where the revenue generated is exceeded by the expenditures made by the government.
• Therefore, the smaller businesses had to succumb due to the power of capital of MNCs.
• In a democracy, while the majority rule is an acceptable way of life, the minorities are to have the right to work for and secure their interests.

In some contexts this course of or concept is usually, however not always, known as deregulation. Although economic liberalization is usually related to privatization, the two can be quite separate processes. It effectively ended the state monopoly over the mining of coal sector and opened up the for private, foreign investments, as well as private sector mining of coal. Public sector has shown a very low rate of return on capital invested. Most of public sector enterprises have become a burden rather than being an asset to the nation. It also set the tone to free the determination of rupee value in the foreign exchange market from the government.

Another major advantage of the liberalization period has been the shift in the pattern of exports from traditional items such as clothes, tea and spices to automobiles, steel, IT. The “made in India” brand, which did not evoke any sort of loyalty has now become a brand name by itself and is now recognised around the world for its quality. The reforms have transformed the education sector with a huge talent group of qualified specialists which are available to share their knowledge and competence. Previously Public sector was given the importance with a view to help in industralisation and removal of poverty. 100% foreign equity is permitted in cases of mining; projects for electricity generation, transmission and distribution; ports; harbours; oil refining; all manufacturing activities in SEZs and some activities in telecom sector.

Features of Liberalization in India

Liberal doctrine gives more importance to the individual over the group. Liberals argue that, from the recognition of individual freedoms, nations can progress. According to him, the current economic crisis triggered by the Covid-19 pandemic is more challenging than during the 1991 economic crisis and the nation would need to recalibrate its priorities to ensure a dignified life for all Indians.

In economy and trade Economic liberalization refers to the reduction or elimination of government regulations or restrictions on private business and trade. For example, the European Union has liberalized gas and electricity markets, instituting a competitive system. The companies had the liberty to decide the size and scale of production along with the price of its products. The license was required only for the six industries of cigarettes, liquor, defense equipment, dangerous chemicals, industrial explosive, and drug and Pharmaceuticals.

Globalization means to encourage foreign private participation in India’s industrial development. Disinvestment means the process of sale of public sector enterprises to the private sector. The stock market has improved hugely after liberalization which means that both domestic and foreign investment has improved many times due to liberalization.

Liberalisation of rates of interest i.e. these are to be determined by the free play of the forces of demand and supply, and not by the decision of the RBI . Restrictions on operations of foreign banks were eased and new ones were allowed to enter. The Central Government has enacted a new law, the Competition Act, 2002, for upholding competition in the Indian market. To sum up, the measures of liberalisation and globalisation have changed the scene all over the world. Comparatively, this policy has proved more advantageous for the economically advanced countries, as they possess more abilities for exports. On the other hand countries in Africa and Asian subcontinents are less beneficiaries.

Throughout much of history, individuals have been submerged in and subordinate to their clan, tribe, ethnic group, or kingdom. In this respect, liberalism stands for the emancipation of the individual. The government of India has introduced liberal reduction in taxation rates on direct tax & indirect tax, customs, excise, service which has greatly benefited the firms operating in India.

Local industrial units and business units are required to face the competition from foreign companies. As a result, they are required to improve qualitative and quantitative performance. In order to get scope in foreign markets, the Indian industries are required to produce superior quality products and regularise their supply.

On the other hand, it is difficult for them to face the competition with MNC’s in local markets. So globalisation and liberalisation has posed new challenges before them. India’s IT services have become globally competitive as many companies have outsourced certain administrative features to nations where prices are decrease. The entry of overseas service suppliers can be a constructive in addition to negative development. To get rid of economic malfunctions and insufficiency of funds to meet the requirements, economic liberalization policies were announced in 1991.

The supporters of Liberalism place emphasis upon the organised intellectual power of human individual as the basis of all human progress and development. PreserveArticles.com is a free service that lets you to preserve your original articles for eternity. In 1991, the Government of India took several decisions about industrial development which indicated a tendency towards more and more privatisation. There has been an increased number of mergers and acquisitions in the post-liberalization period.

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By permitting free entry of the multinational corporations in the consumer goods sector. LPG model hit the interests of the small and medium sector engaged in the production of consumer goods. There is a danger of labor displacement in the small industry if the unbridled entry of MNCs is continued. Financial and technological support, particularly the infrastructural needs of agro-exports. The investors in India were diversified and they could choose their vivid portfolio due to liberalization. This offered more options to investors who could not avail such diverse options before.

One of the most notable advantages of Liberalisation is that it allowed free movement of capital, allowing companies to access big funds easily from investors. In the pre-liberalization period, features of liberalisation undertaking costly projects was not possible for firms due to the dearth of capital. This was rectified in 1991, initiating higher growth rates for private firms and therefore the economy.

The RBI decides the amount of money that the banks can keep with themselves, fixes interest rates, nature of lending to various sectors, etc. As a result of liberalisation, industrial and business sector have ‘received a set back’. There are complaints on large scale that Indian economy is required to pass through “recession phase” of trade cycle. Many large scale, medium size industries, business units are compelled to ‘pull down the shutters’ and further it has resulted in large-scale retrenchment of employees. In many companies, there is serious consideration of “Voluntary retirement schemes”. The service sector might be probably the most liberalized of the sectors.

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This kind of privatization can be seen in sports leagues that make use of government-owned stadiums. India foreign trade policy is again suspecting trade liberalisation, as India has already decided to opt-out of the 16-nation Regional Comprehensive Economic Partnership trade deal. Devaluation of the Indian rupee against foreign currencies increased the supply of foreign exchange into the Indian economy. Many production areas which earlier were reserved for SSI (small-scale industries) were de-reserved.

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The coalition also began reducing taxes, enacted a fiscal policy aimed at reducing deficits and debts and increased initiatives for public works. The New Industrial Policy and 1991 Budget was decried by opposition leaders as “command budget from the IMF” and worried that withdrawal of subsidies for fertilizers and hikes in oil prices would harm lower and middle-class citizens. Critics also derided devaluation, fearing it would worsen runaway inflation that would hit the poorest citizens the hardest while doing nothing to fix the trade deficit.

Withdrawal of ownership and management of the public sector companies from the government to the private sector. The standard of living has become higher in the era of globalization due to an increase in income and opportunities for a larger section of people in the society. Companies hire regular services from external sources mostly from other countries. The services are mainly backend computers related such as BPOs, KPOs. Outsourcing occurs when a company retains another business to perform some of its work activities. These companies are usually located in foreign countries with lower labour costs and a less strict regulatory environment.

Liberalization of services in the developing world

For biographies of individual philosophers, see John Locke; John Stuart Mill; John Rawls. Modern liberals are generally willing to experiment with large-scale social change to further their project of protecting and enhancing individual freedom. Conservatives are generally suspicious of such ideologically driven programs, insisting that lasting and beneficial social change must proceed organically, through gradual shifts in public attitudes, values, customs, and institutions.

The reputed Indian businesses have flourished in the post-liberalization period indicating that liberalization has impacted the Indian businesses positively. Liberalization helped many Indian companies that were previously resource-deprived gain momentum with the aid of foreign investments. Before the New Economic Policy of 1991, the private sector was in control of the government. Because of this, the domestic industries were not allowed to take any decisions regarding the industry’s work without the government’s interference. This resulted in a fall in professionalism and inefficiency of work within the industry. With the introduction of the liberalisation policy, this sector gained the freedom of decision-making without any interference from the government.

Although some attempts at liberalisation were made in 1966 and the early 1980s, a more thorough liberalisation was initiated in 1991. The reform was prompted by a balance of payments crisis that had led to a severe recession and also as per structural adjustment programs for taking loans from IMF and World Bank. Several reforms were brought in insurance, money and capital markets, etc.