LPG

1. PRESENTED BY :-
 ADHIRAJ SINGH
 SAGAR
 AMIT YADAV
 AFTAB
 Akash Gahlot

2. WHAT IS NEW ECONOMIC POLICY
1991?
 It refers to ongoing economic
liberalisation or relaxation started
in 1991 of the countries economic
policies
 It was introduced with the goal of
making the economy more
market-oriented and expanding
the role of the private and foreign
investment.

3. NEW ECONOMIC
POLICY
LIBERALISATION PRIVATISATION GLOBALISATION

4. Reasons for implementing LPG
• Large and growing fiscal imbalances.(Gross fiscal deficit rose to
12.1% of GDP in 1991)
• Growing inefficiency in the use of resources.
• Low foreign exchange reserves.
• High inflation rate
• The low annual growth rate of Indian economy stagnated around
3.5% from 1950s to 1980s, while per capita income averaged
1.3%.

5. LIBERALISATION
The first aspect of new economic policy was
liberalisation
Liberalisation of an economy means removing
or relaxing government controls and
restrictions on economic activities
Relief for foreign invertors
Revaluation of Indian Currency
New Industrial Policy
New Trade Policy
Import Technology
Encouraging foreign tie-ups
Privatisation in Public Sector

6. POSITIVE EFFECTS
 Increase in foreign investment
 Increase in Production
 Technological advancement
 Increase in GDP growth rate
NEGATIVE EFFECTS
 Increase in Unemployment
 Decrease in Tax Receipt

7.  The transfer of ownership property pr business from
the government to the private sector is termed
privatization.
 Increasing inefficiency on part of public sector led to
privatization
 Forms of Privatization :-
 Decentralization
 Joint Venture
 Leasing
 Franchising

8. POSITIVE EFFECTS
 Private companies cut cost and
be more efficient
 Increased competition
 More Responsive to customer
complaints
NEGATIVE EFFECTS
 Lack of welfare
 Ignore the weaker section
 Privatisation is expensive
IMPACTS OF PRIVATISATION

11. GLOBALISATION
Globalisation means reduction or
removal of government restriction on
the movement of goods and service,
capital, technology and talent across
national boundaries.
It is the increasing interdependence,
integration and interaction among
people and cooperation in various
locations around the world.

12. POSITIVE EFFECTS
 Expansion of market
 Development of infrastructure
 Higher living standards
NEGATIVE EFFECTS
 Cut throat competitions
 Rise in Monopoly
 Take over of Domestic Firms
IMPACTS OF GLOBALISATION

13. Impact of NEP 1991 on Indian Economy
14-10-2016 13Economic Policy 1991
a) Increasing Competition
b) More Demanding Customers
c) Rapidly Changing Technological
Environment
d) Necessity for Change
e) Need for Developing Human Resources
f) Market Orientation

14. Foreign Direct Investment
Foreign direct investment (FDI) is a direct investment into
production or business in a country by an individual or company
in another country, either by buying a company in the target
country or by expanding operations of an existing business in
that country.

15. FDI in India
FDI caps in various sectors:
• Defence 26%
• Insurance 49% (earlier 26%)
• Telecom 100% (earlier 74%)
• Single brand retailing 100%
• Multi brand retailing 51%
• Civil aviation 49%

16. Multi National Corporation
Multinational corporation (MNC) is a enterprise that manages
production or delivers services in more than one country can also
be referred to as an international corporation.

17. Multi National Corporation

18. GROWTH OF GDP POST LIBERALISATION

19. Conclusion
• The advent of globalization as a result of liberalization and
privatization has both positive and negative impacts on our economy.
• While one group of people argue that globalization provides greater
opportunities ,opens up new markets, promotes the use of better
technology and increases the efficiency of production,
• Another group of people feel it does not protect the domestic
industries particularly in developing nations.
• From India’s perspective ,it has improved our condition of living and
opened up employment in field like entertainment ,IT
,telecommunication, travel and hospitality .