Class 12 Economics - TELANGANA
Liberalisation Privatisation and Globalisation
This chapter explores the major economic reforms introduced in India in 1991, commonly known as the LPG policy. Students learn about the crisis that led to these reforms and the three pillars: Liberalisation (removing government controls), Privatisation (transferring ownership to the private sector), and Globalisation (integrating the Indian economy with the world). For Telangana (TSBSE) board exams, understanding the arguments for and against globalization, outsourcing, and the role of WTO is crucial for scoring high marks in both short and long-answer questions.
Start Learning FreeKey Concepts
New Economic Policy (NEP) 1991
A set of economic reforms introduced by the Government of India to overcome a severe balance of payments crisis and stimulate growth.
Liberalisation
The process of releasing the economy from excessive government regulations, licensing, and controls to encourage private enterprise.
Privatisation
The shedding of ownership or management of a government-owned enterprise to the private sector through disinvestment or outright sale.
Globalisation
The integration of the domestic economy with the world economy through trade, capital flows, technology transfer, and free movement of labor.
Outsourcing
A business practice where companies hire external agencies, often abroad, to perform regular business processes like IT services and customer support.
World Trade Organisation (WTO)
An international organization established in 1995 to promote free international trade and resolve trade disputes among member nations.
Important Formulas
Board Exam Info
In the Telangana (TSBSE) Class 12 Economics board exam, this chapter typically carries around 8 to 12 marks. Students can expect 2-mark, 5-mark, and 10-mark essay questions focusing on the need for 1991 reforms, the positive and negative impacts of globalization, and the definition of LPG components.
Frequently Asked Questions
What were the main reasons for the introduction of the 1991 economic reforms?
Key reasons included a severe balance of payments crisis, depleting foreign exchange reserves, high inflation, poor performance of public sector undertakings, and mounting fiscal deficits.
What is the difference between Liberalisation and Privatisation?
Liberalisation refers to the removal of state-imposed restrictions and controls on economic activities, whereas privatisation involves the transfer of ownership or management of public sector enterprises to private hands.
Why is India considered a favored destination for outsourcing?
India attracts global companies due to the availability of skilled manpower with good English proficiency at relatively lower wage rates.
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