Q.What are the essential features of:
a. Liberalisation,
b. Privatization and
c. Globalisation?

The New Industrial Policy of 1991 rested on three reforms — liberalisation, privatisation and globalisation. Each has its own set of essential features, drawn from the way the CBSE Class 12 Business Studies chapter on Business Environment describes them.

• Liberalisation — freeing industry from the licence-permit-quota raj: abolishing licensing for most industries (except a short list), freedom to decide the scale of business with no limits on expansion or contraction, removal of restrictions on the movement of goods and services, freedom in fixing prices, lower tax rates, and simpler procedures for imports, exports and for attracting foreign capital and technology.
• Privatisation — giving a greater role to the private sector and a reduced role to the public sector, mainly through planned disinvestment of public sector enterprises, with loss-making and sick units referred to the Board of Industrial and Financial Reconstruction (BIFR). …

As part of its 1991 economic reforms, the Government of India announced a New Industrial Policy in July 1991 which sought to liberate industry from the shackles of the licensing system (liberalisation), drastically reduce the role of the public sector (privatisation) and encourage foreign private participation in India's industrial development (globalisation). This CBSE Class 12 Business Studies chapter on Business Environment sets out the essential features of each.

(a) Essential features of Liberalisation

Liberalisation meant freeing Indian business and industry from unnecessary controls and restrictions — it signalled the end of the licence-permit-quota raj. Its essential features were:

1. Abolishing the licensing requirement in most industries, except a short list.
2. Freedom to decide the scale of business activities — no restrictions on the expansion or contraction of a business.
3. Removal of restrictions on the movement of goods and services.
4. Freedom in fixing the prices of goods and services.
5. Reduction in tax rates and the lifting of unnecessary controls over the economy.
6. Simplifying procedures for imports and exports.
7. Making it easier to attract foreign capital and technology to India.

(b) Essential features of Privatisation

Privatisation aimed to give a greater role to the private sector in nation-building and a reduced role to the public sector — a reversal of the earlier development strategy. Its essential features were:

1. Redefining the role of the public sector in the New Industrial Policy of 1991.
2. Adopting a policy of planned disinvestment of the public sector — disinvestment being the transfer of public sector enterprises to the private sector, which dilutes the government's stake. If government ownership is diluted beyond 51 per cent, ownership and management pass to the private sector.
3. Referring loss-making and sick public enterprises to the Board of Industrial and Financial Reconstruction (BIFR).

(c) Essential features of Globalisation …