Class 11 Economics - ANDHRA-PRADESH
Liberalisation Privatisation and Globalisation
This chapter explores the New Economic Policy (NEP) introduced in India in 1991 to overcome a severe economic crisis. Andhra Pradesh (BSEAP) Class 11 students will learn how India shifted from a state-controlled economy to a market-driven one through Liberalisation, Privatisation, and Globalisation (LPG). The chapter covers the background of the 1991 crisis, the stabilization and structural reform measures, the role of outsourcing, World Trade Organization (WTO) functions, and an appraisal of LPG policies. This is a high-scoring chapter crucial for board exams, frequently featuring analytical questions on the pros and cons of economic reforms.
Start Learning FreeKey Concepts
Liberalisation
The loosening of government regulations and controls over private sector enterprises, removing trade barriers, and freeing the economy from unnecessary restrictions.
Privatisation
The transfer of ownership, management, and control of public sector enterprises (PSEs) to the private sector, often through disinvestment.
Globalisation
The integration of the domestic economy with the world economy through the free flow of goods, services, technology, capital, and labor across international borders.
New Economic Policy (NEP) 1991
A set of economic reforms introduced in July 1991 consisting of stabilization measures (short-term) and structural reform measures (long-term) under the LPG model.
Outsourcing
A business process where a company hires external agencies (often in developing countries like India) to perform regular business services previously done internally, driven by low labor costs and IT infrastructure.
World Trade Organization (WTO)
An international organization founded in 1995 (replacing GATT) to promote free and fair international trade, establish global trade rules, and resolve trade disputes among member nations.
Important Formulas
Board Exam Info
In the Andhra Pradesh (BSEAP) Class 11 Economics board exams, this chapter typically carries around 8 to 12 marks. Students can expect Very Short Answer Questions (VSAQs) worth 2 marks, Short Answer Questions (SAQs) worth 5 marks on topics like the merits and demerits of globalisation, and Essay Questions (Long Answer Questions) worth 10 marks analyzing the need for the 1991 reforms or explaining the components of LPG.
Frequently Asked Questions
Why was the New Economic Policy introduced in India in 1991?
It was introduced due to a severe balance of payments crisis, mounting foreign debt, high inflation, depleted foreign exchange reserves, and poor performance of public sector undertakings.
What is the difference between Liberalisation and Privatisation?
Liberalisation means reducing government rules and controls on businesses, whereas Privatisation involves transferring the ownership or management of public sector enterprises to private individuals or companies.
What are the main criticisms of Globalisation?
Critics argue that globalisation benefits developed nations more than developing ones, leads to the exploitation of cheap labor, harms domestic small-scale industries, and causes environmental degradation.
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