Class 12 Economics - BIHAR
Liberalisation Privatisation and Globalisation
This chapter explores the major economic reforms introduced in India in 1991, commonly known as the LPG policy. Class 12 students under the Bihar School Examination Board (BSEB) will learn how India shifted from a closed, state-controlled economy to an open, market-driven global economy. The chapter covers the background of the 1991 economic crisis, the dismantling of the License Raj through Liberalisation, the transfer of ownership via Privatisation, and the integration of the domestic economy with the world market through Globalisation. Understanding these concepts is crucial for board exams as they form the foundation of modern Indian economic development.
Start Learning FreeKey Concepts
New Economic Policy (NEP) 1991
A set of economic reforms introduced by the Government of India in July 1991 to rescue the country from a severe balance of payments crisis and structural stagnation.
Liberalisation
The relaxation of government rules, regulations, and industrial licensing, allowing private enterprises greater freedom to operate and make business decisions.
Privatisation
The process of transferring ownership, management, and control of public sector enterprises (PSUs) to private individuals or companies.
Globalisation
The integration of the national economy with the world economy through the free flow of goods, services, technology, capital, and labor across international borders.
Outsourcing
A business practice where a company hires external organizations (often in developing countries like India) to perform regular business activities and services.
World Trade Organisation (WTO)
An international organization established in 1995 to promote free trade by reducing tariff and non-tariff barriers among member countries.
Important Formulas
Board Exam Info
In the Bihar (BSEB) Class 12 Economics exam, this chapter generally carries around 8 to 12 marks. Questions typically include objective (MCQs), short-answer questions (explaining terms like outsourcing or disinvestment), and long-answer descriptive questions evaluating the merits and demerits of the 1991 reforms.
Frequently Asked Questions
What were the main reasons for the introduction of LPG policies in 1991?
India faced a severe balance of payments crisis, high inflation, mounting fiscal deficits, poor performance of public sector undertakings, and depletion of foreign exchange reserves to barely enough for two weeks of imports.
What is the difference between outsourcing and globalization?
Outsourcing is a specific business practice where companies contract out regular business processes to external agencies, whereas globalization is the broader economic integration of countries worldwide.
What are the main objectives of the World Trade Organisation (WTO)?
To establish a rule-based trading system, ensure optimum utilization of world resources, protect the environment, and eliminate discriminatory treatment in international trade.
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