Class 12 Economics - UP
Liberalisation Privatisation and Globalisation
This chapter in Class 12 Economics for Uttar Pradesh (UPMSP) students explores the sweeping economic reforms introduced in India in 1991, commonly known as the LPG policy. It covers the background of the 1991 economic crisis that forced India to adopt New Economic Policy (NEP). Students will learn about Liberalisation (removal of state controls), Privatisation (transfer of ownership from public to private sector), and Globalisation (integration of the domestic economy with the world economy). It holds significant weight in board exams, helping students understand modern macroeconomic shifts, the role of international organizations like WTO, and the overall impact of reforms on the Indian economy.
Start Learning FreeKey Concepts
New Economic Policy (NEP) 1991
A set of economic reforms introduced by the Government of India in July 1991 to overcome a severe balance of payments crisis and steer the economy towards rapid growth.
Liberalisation
The process of releasing the economy from unnecessary state restrictions, controls, and license raj, making it more market-oriented.
Privatisation
The shifting of ownership, management, and control of public sector enterprises (PSUs) to private sector entrepreneurs, either partially or fully.
Globalisation
The integration of the national economy with the world economy through the free flow of goods, services, technology, capital, and labor across borders.
Outsourcing
A business practice where a company hires external organizations, often abroad, to perform regular business services like IT, customer support, and accounting.
World Trade Organisation (WTO)
An international organization established in 1995 to promote free trade globally, rule on trade disputes, and administer WTO trade agreements.
Important Formulas
Board Exam Info
In the Uttar Pradesh (UPMSP) Class 12 Economics board exam, this chapter typically carries around 6 to 8 marks. Questions usually include very short objective types, short answer questions on the differences between liberalisation and privatisation, and long descriptive questions evaluating the pros and cons of globalisation or the causes of the 1991 economic crisis.
Frequently Asked Questions
What were the main causes of the 1991 economic crisis in India?
The crisis was primarily caused by a huge fiscal deficit, a severe balance of payments deficit, depletion of foreign exchange reserves to less than enough for 2 weeks of imports, rising inflation, and poor performance of Public Sector Undertakings (PSUs).
What is the difference between Outsourcing and Globalisation?
Outsourcing is a specific business practice where companies contract out regular tasks to third-party providers (often overseas), whereas Globalisation is a much broader concept involving the complete economic, cultural, and political integration of countries worldwide.
Is WTO beneficial for developing countries like India?
WTO is a double-edged sword; it provides developing nations access to global markets and fair trade rules, but it also creates challenges due to unequal bargaining power, agricultural subsidies in developed nations, and stringent patent laws like TRIPS.
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