Class 12 Economics - RAJASTHAN
Liberalisation Privatisation and Globalisation
This chapter explores the New Economic Policy (NEP) introduced in India in 1991 to overcome a severe economic crisis. Rajasthan RBSE Class 12 students will learn how India shifted from a state-controlled economy to a market-driven one through Liberalisation, Privatisation, and Globalisation (LPG). The chapter discusses the background of the 1991 reforms, financial and tax sector reforms, trade and foreign exchange liberalisation, disinvestment, outsourcing, and the role of the World Trade Organisation (WTO). It is crucial for board exams as it forms the foundation of modern Indian economic development and regularly features both conceptual and analytical questions.
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 economy from balance of payments crisis and inflation.
Liberalisation
The process of releasing the economy from unnecessary state controls and restrictions, making it more competitive and open to private enterprise.
Privatisation
The transfer of ownership, management, and control of public sector enterprises (PSUs) to the private sector.
Globalisation
The integration of the domestic economy with the world economy through the free flow of goods, services, technology, and capital across borders.
Outsourcing
A business process where companies hire external agencies, often in other countries, to perform routine or specialized business services like call centers and legal advice.
World Trade Organisation (WTO)
An international organization founded in 1995 (replacing GATT) to promote free and fair global trade among member nations.
Important Formulas
Board Exam Info
In the Rajasthan (RBSE) Class 12 Economics board exam, this chapter typically carries around 6 to 8 marks. Questions usually include multiple-choice questions (MCQs), short-answer questions defining key terms like outsourcing or disinvestment, and long-answer essay questions explaining the need for 1991 reforms or the positive and negative impacts of globalisation.
Frequently Asked Questions
What were the main reasons for introducing the 1991 economic reforms?
Key reasons included a severe balance of payments crisis, mounting fiscal deficit, high inflation, depleted foreign exchange reserves, and poor performance of Public Sector Undertakings (PSUs).
What is the difference between Outsourcing and In-sourcing?
Outsourcing involves hiring external service providers (often abroad) for business tasks, whereas in-sourcing involves performing those tasks internally within the organization.
What is Disinvestment?
Disinvestment is the process where the government sells a part or whole of its shares in Public Sector Undertakings (PSUs) to the private sector to raise funds and improve efficiency.
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