Liberalization, Globalization & Privatization in Indian Economy

If we look behind in the history of India it is very much affected by the foreign invaders. Foreign invaders came in India and tried to ruin India’s economy, culture, society, religion and very few of them was added any value in India. After Independence India’s economic condition was in worst condition. We were fully dependent only on Agricultural sector, we had no contemporary industries, technologies, skilled workforce, investments and opportunities, and even our exchequer was not enough. This condition become much serious when we were imposed war with China and Pakistan.

Jawhar Lal Nehru, the first Prime Minister of Independent India had to made economic foundation, took visionary decision, He chosen industrialization to lead India’s economy despite we already had agriculture as most dependent sector. With this decision India focused on Industrial development but the problem was persisting the less technology and less skilled workforce.

Choosing Industrialization, technical requirement, fast economic growth, infrastructure development, requirement of funds and etc

These needs sow the first seeds of necessity of globalization.

The population of India was growing fast, and unemployment was increasing in same proportion. India’s huge workforce was dependent on agricultural sector. Agricultural is still unorganized sector and biggest job providing sector to unskilled workforce. Fast industrialization growth required to turn workforce toward industries and make them skilled, provide them employment.

Therefore, the second requirement of globalization is to provide employment to Indian citizens.

Globalization can give India

·       Modern Technology

·       Skilled workforce

·       Finance

·       Standard of living

·       Fast economic growth

·       Fast Industrialization

·       Foreign market access

·       Foreign capital inflow

However, Indian economic policy after independence was influenced by the colonial experience the government of India attempted to close the Indian economy to the outside world. The Indian currency, rupee, was in-convertible and high tariffs and import licensing prevented foreign goods reaching the market. Therefore, India need to have a strong policy before to be liberalized for globalization, then India introduce LPG policy in 1991, which stands for Liberalization, Privatization, and Globalization.

Liberalization:

Liberalization term used to end or lose government registration on all those sectors which were under fully control of Indian government. These sectors were opened to private companies, private companies can start working without or with fewer restrictions and government allow private players to expand for the growth of the country.

Benefits:

·       Increase competition among domestic industries.

·       Product quality improved, adopted new technologies

·       Get access of foreign Market and resources.

·       Expand global market frontiers of the country.

·       Low debt burden on the country.

·       Increased chances of employment.

Privatization:

Leaving government ownership on government enterprises by disinvestment, selling share and reduce its control over industry. It helps to increase private participation in the market and increase competition to produce quality product.

·       Improve the financial situation of the government.

·       Reduce the workload of public sector companies.

·       Raise funds from disinvestment.

·       Increase the efficiency of government organizations.

·       Provide better and improved goods and services to the consumer.

·       Create healthy competition in the society.

·       Encouraging foreign direct investments (FDI) in India.

Globalization:

Globalization mean to integrate our economy with world economy by taking and giving access over each other’s market. In other word globalization is a border less business world, wherein one country needs can be fulfilled by any other.

The economy of India has developed rapidly since it started to coordinate with world economy in 1991. It has extraordinary effect on our financial condition. Its normal annual rate has jumped from 3.5% (1950– 1980) to 7.7% (2002– 2012). That rate went to 9.5% from 2005– 2008. Monetary development has additionally prompted increments in the per capita total national output (GDP), from $1,255 in 1978 to $3,452 in 2005, lastly to $3,900 in 2012.

Its major impact can be seen on the outsourcing industry by which Information Technology and other supportive Industries of India. Outsourcing industry is one of the highest job creating sectors. By the globalization small level companies get opportunities to produce world class products by collaborate with global level companies.

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