Class 11 Economics - ODISHA
Liberalisation Privatisation and Globalisation
This chapter explores the major economic reforms introduced in India in 1991, known as the New Economic Policy (NEP). It covers the three pillars of reforms: Liberalisation, Privatisation, and Globalisation (LPG). Students will learn why India faced a severe balance of payments crisis, leading to structural adjustment programs mandated by the World Bank and IMF. The chapter evaluates the positive and negative impacts of these reforms on the Indian economy, making it a crucial topic for Odisha BSE board exams to understand modern economic development.
Start Learning FreeKey Concepts
New Economic Policy (1991)
A set of economic reforms introduced by the Government of India in July 1991 to rescue the economy from a severe financial crisis and integrate it with the global market.
Liberalisation
The process of releasing the economy from unnecessary state controls and restrictions, such as industrial licensing, price controls, and import quotas.
Privatisation
The transfer of ownership, management, and control of public sector enterprises (PSUs) to the private sector through disinvestment or outright sale.
Globalisation
The integration of the domestic economy with the world economy through the free flow of trade, capital, technology, and labour across borders.
Outsourcing
A business practice where companies hire external agencies, often abroad, to perform regular business processes like IT services, customer care, and accounting.
World Trade Organisation (WTO)
An international organization established in 1995 to oversee international trade agreements and promote free trade among member countries.
Important Formulas
Board Exam Info
In the Odisha BSE Class 11 Economics examination, this chapter typically carries around 8 to 12 marks. Questions usually include short-answer questions defining LPG, distinguishing between internal and external trade reforms, and long-answer questions discussing the arguments for and against globalisation and the need for 1991 reforms.
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, acute balance of payments deficit, depleted foreign exchange reserves, and heavy foreign debt.
What is the difference between Liberalisation and Privatisation?
Liberalisation means removing government restrictions and controls on businesses, whereas Privatisation involves transferring the ownership of public sector enterprises to private individuals or companies.
What are the main criticisms of Globalisation?
Globalisation is often criticized for leading to the exploitation of local labor, posing threats to domestic small-scale industries, increasing income inequality, and causing environmental degradation.
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