Question

Long answer type questions.

Explain Globalization, Liberalization and Privatization.

Answer 1

i. Globalization - It refers to the process of integration of various economies of the world. It implies reducing the restrictions on imports and exports, such as licensing and tariffs. In India, the following policies were followed with regard to globalization:
a) Removal on restrictions on imports
b) Abolition of export duties
c) Reduction in import duties

ii. Liberalization - It refers to the removal of unnecessary controls and restrictions of the government like licences, permits and quotas. India initiated liberalization of industries in 1991. Liberalization of industries in India took the following form:
a) Licenses required for the establishment of industries were abolished.
b) Enterprises were free to decide the scale and size of production and the price of their products.
c) Restrictions were removed on the movement of goods and services.
d) Procedures regarding exports and imports were relaxed.

iii. Privatization - Privatization implies according greater role to the private sector and reducing the involvement of the public sector. Privatization was followed in India in the following manner:
a) Disinvestment of public sector enterprises
b) Establishment of the Board of Industrial and Financial Reconstruction for the revival of the sick and loss-making enterprises
c) Dilution of the government’s stake in public-sector enterprises