Ch 14Liberalisation, Privatisation and Globalisation: An Appraisal — Class 12 Economics, concept-first.

Worth keeping in mind while reading a chapter that is, on the surface, mostly about growth numbers and reform statistics.

The roots of the 1991 crisis lie in the way the economy was managed through the 1980s. A government raises money to run its administration and pay for its policies from sources such as taxes and the e…

Before the 1991 reforms, the Indian economy was tied down by a dense web of rules, laws and permissions that were originally meant to regulate economic activity but had, over time, become serious obst…

Under the old regime, the Indian industrial sector was controlled by the government in several overlapping ways.

The financial sector is the part of the economy made up of institutions that mobilise and channel funds.

Tax reforms deal with changes in the government's taxation and public expenditure policies. Taxation and public expenditure together are known as the government's fiscal policy, so tax reform is reall…

The reform of the foreign exchange market was the first important reform undertaken in the external sector. It was closely tied to the immediate crisis that India faced in 1991.

The liberalisation of the trade and investment regime was undertaken to make Indian industrial production more competitive internationally, and to attract foreign investment and technology into the ec…

Privatisation means giving up the government's ownership or management of a state-owned enterprise. A government company can be turned into a private one in two ways: either the government withdraws f…

Globalisation is generally understood to mean the integration of a country's economy with the world economy.

Outsourcing is one of the most important outcomes of the globalisation process, and one in which India has played a leading role.

The World Trade Organisation (WTO) is the central international institution that governs the rules of world trade, and it is an important feature of globalisation as it affects India.

The reform process launched in 1991 has now completed three decades, which makes it possible to look back and assess how the Indian economy has actually performed during this period.

One of the most important tests of any development strategy is whether the growth it produces also creates jobs for people. This is exactly the point on which the reforms have been questioned.

Agriculture is one of the areas where the reforms are judged to have fallen short, and the assessment of the reform period is quite critical on this count.

Industry is another sector where the reforms are judged to have produced disappointing results, and the assessment points to a clear slowdown rather than the acceleration that had been hoped for.

Disinvestment refers to the government selling off a part of its stake in public sector enterprises (PSEs).

Fiscal policy concerns the government's decisions on taxation and public expenditure. The assessment of the reform period is critical of how the reforms affected the government's fiscal position, espe…

Globalisation, pursued through the policies of liberalisation and privatisation, has produced both positive and negative results — for India and for other countries alike — and views on it remain shar…

Key points to remember