Class XII Chapter VI Economics Economic Reforms Since

Class XII: Chapter –VI (Economics ) Economic Reforms Since 1991 Module II Ø Globalisation – Meaning ØStrategies of Globalisation ØAn appraisal of LPG Policies ØMerits and Demerits of Economic reforms ØWhich way to go?

GLOBALISATION Globalisation means integrating the economy of a country with the economies of other countries under conditions of free flow of trade and capital across borders. Globalisation may be defined as a process associated with increasing openness, growing economic inter dependence and deepening economic integration in the world economy. Economic reforms aim at integrating the Indian economy with the global economy. As a result there will be unrestricted flow of goods and services, technology and expertise between India and rest of the world.

STRATEGIES OF GLOBALISATION 1. Increase in equity limits of foreign 2. 3. 4. 5. investment Partial convertibility Long term trade policy Reduction in tariffs Withdrawal of quantitative restrictions

AN APPRAISAL OF LPG POLICIES Merits : 1. Vibrant economy 2. Stimulants to industrial production 3. A check on Fiscal deficit 4. A check on Inflation 5. Consumers Sovereignty 6. A shift from monopoly market to competitive market

Demerits: 1. Neglect of agriculture 2. Urban concentration of growth process 3. Economic colonialism 4. Spread of consumerism 5. Lopsided growth process 6. Cultural erosion

Which way to go? Should we or should we not subscribe to the LPG policies ? It is a debatable issue. In the present scenario LPG policies are the only way out to accelerate the pace of growth and development Indeed perusal of LPG policies was to a greater extent a matter of economic compulsion rather than a matter of choice for the politicians of the country. However, a compulsion should never mean a surrender. It is strongly recommended that LPG Policies are pursued with guarded precautions.