Class 11 Economics - KARNATAKA
Liberalisation Privatisation and Globalisation
This chapter explores the major economic crisis of 1991 in India and the subsequent New Economic Policy (NEP) introduced to revive the economy. Karnataka (KSEEB) Class 11 students will learn how India shifted from a controlled, closed economy to a market-driven, open economy. The chapter details the three pillars of NEP: Liberalisation (reducing government controls), Privatisation (transferring ownership to the private sector), and Globalisation (integrating with the world economy). It also evaluates the pros and cons of these reforms, including outsourcing and the role of the World Trade Organisation (WTO), which are highly important topics for board exams.
Start Learning FreeKey Concepts
New Economic Policy (NEP) 1991
A set of economic reforms introduced by the Government of India to overcome the balance of payments crisis and restructure the economy.
Liberalisation
The process of removing unnecessary government restrictions and controls over economic activities, promoting industrial licensing and free market operations.
Privatisation
The shedding of ownership or management of a government-owned enterprise to the private sector, often through disinvestment.
Globalisation
The integration of the economy of a country with the world economy through free trade, capital movement, and cross-border migration.
Outsourcing
A business practice where a company hires regular service providers from outside, often abroad, to perform tasks like IT-enabled services and customer care.
World Trade Organisation (WTO)
An international organization established in 1995 to oversee international trade agreements and provide a framework for negotiating trade deals.
Important Formulas
Board Exam Info
In the Karnataka (KSEEB) Class 11 Economics board exams, this chapter typically carries around 8 to 12 marks. Questions usually include 1-mark objective questions, 2-mark definitions, 5-mark short answers explaining features of LPG or merits and demerits, and occasional 8-mark essay questions on the need for economic reforms or the impact of globalisation.
Frequently Asked Questions
Why was the New Economic Policy introduced in 1991?
It was introduced to tackle a severe economic crisis characterized by high inflation, depleting foreign exchange reserves, heavy fiscal deficits, and poor performance of Public Sector Undertakings.
What is the difference between outsourcing and international trade?
International trade involves buying and selling finished goods and services across borders, whereas outsourcing involves contracting out regular business processes (like IT or customer support) to external agencies, often in other countries.
What is disinvestment?
Disinvestment refers to the process where the government sells a part or whole of its shares in Public Sector Undertakings (PSUs) to private investors to raise funds and improve efficiency.
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