Class 11 Economics - CBSE
Liberalisation Privatisation and Globalisation
This chapter explores the major economic crisis of 1991 in India and the subsequent structural reforms introduced to revive the economy. Students will learn about the New Economic Policy (NEP) which shifted India's focus towards a market-oriented framework through Liberalisation, Privatisation, and Globalisation (LPG). For CBSE board exams, this chapter is crucial as it forms the foundation of modern Indian economic development, explaining how India transitioned from a controlled state-led regime to a globally integrated economy, frequently appearing in both short-answer and high-weightage analytical questions.
Start Learning FreeKey Concepts
New Economic Policy (NEP) 1991
A set of economic reforms introduced by the Indian government in July 1991 to overcome the severe Balance of Payments crisis and restructure the economy.
Liberalisation
The process of freeing the Indian economy from unnecessary government controls and restrictions, such as industrial licensing and price controls.
Privatisation
The shedding of ownership or management of government-owned public sector enterprises (PSEs) to private sector companies through disinvestments.
Globalisation
The integration of the national economy with the world economy through the free flow of goods, services, technology, capital, and labor across borders.
Outsourcing
A business process where a company hires regular service providers from outside, often from other countries, to perform tasks like IT support, call centers, and accounting.
World Trade Organisation (WTO)
An international organization founded in 1995 to establish rule-based global trade, replacing GATT and reducing tariffs worldwide.
Important Formulas
Board Exam Info
In CBSE Class 11 Economics, this chapter typically carries around 6 to 8 marks. Common question types include direct definitions of LPG components, differences between internal and international trade, the necessity of the 1991 reforms, and critical evaluations of globalisation.
Frequently Asked Questions
Why were the 1991 economic reforms introduced in India?
The reforms were introduced to tackle a severe economic crisis characterized by high inflation, an acute balance of payments deficit, foreign exchange reserves falling to dangerously low levels, and heavy government debt.
What is the difference between Liberalisation and Privatisation?
Liberalisation refers to the removal of government restrictions and controls over economic activities, whereas Privatisation involves the transfer of ownership and management of public sector enterprises to private hands.
Is Globalisation beneficial for developing countries like India?
Globalisation has brought advanced technology, foreign investment, and greater consumer choices, but critics argue it can negatively impact domestic small-scale industries, agriculture, and widen income inequalities.
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