- Liberalization in the early 1990s in India aimed to boost competition, promote foreign trade and investment, improve technology, and reduce government debt. Measures included devaluation, disinvestment, liberalizing imports, and allowing foreign direct investment.
- The Foreign Exchange Management Act replaced previous restrictions and made foreign transactions simpler. Privatization of public sector units also gained momentum after 2002 to strengthen the private sector and increase efficiency.
- Globalization has led to more interaction with other nations, making India more independent and increasing its GDP. The advertising industry saw increased western influence and targeted rural consumers more recently. While unemployment remains an issue, liberalization has impacted lifestyles as consumers desire improved status through new products.
2. LIBERALISATION
• Liberalization refers to laws or rules being liberalized, or relaxed, by a
government. While liberal is used to refer to more than just politics
you can have liberal parents- liberalization is used only when
speaking of economic or social policies or other government
regulations.
3. Objective
• To boost competition between domestic businesses
• To promote foreign trade and regulate imports and exports
• Improvement of technology and foreign capital
• To develop a global market of a country
• To reduce the debt burden of a country
• To unlock the economic potential of the country by encouraging the private
sector and multinational corporations to invest and expand.
• To encourage the private sector to take an active part in the development
process.
• To reduce the role of the public sector in future industrial development.
• To introduce more competition into the economy with the aim of
increasing efficiency.
4. Initiated Meassures in early 90's
• Devaluation
• Disinvestment
• Dismanting of Industrial Licensing Regime
• Allowing FDI
• Non Resident Indian Scheme
• Abolition of the MRTP Act
• Removal of quantity restrictions on imports
• Wide-ranging financial sector reforms
5. FEMA
Foreign exchange Regulation Act
(FERA) 1973 was replaced by
Foreign exchange Management
Act (FEMA).
The enactment has incorporated
clauses which have facilitated easy
entry of MNCs into the country
and boost the economy.
6. What did it do?
• Foreign transactions have become simpler to encourage foreign trade.
• Indian companies going for Joint ventures with foreign comapnies.
E.g: TVS Suzuki.
• Reduction of import tariffs to encourage import.
• Removal of export subsidies.
• Full convertibility of Rupee on current account to allow sale and
purchase of foreign currency.
• Encouraging freign direct investment.
7. IMPACT OF LIBERALIZATION ON ADVERTISING
• In 1990 the companies that were the top advertisers in India were
also the leading advertisers internationally:
Unilever
Procter & Gambler
Nestle
• 15 of the top 20 ad agencies had affiliation or joint ventures with
foreign agencies, lading to strong western influence.
• P&G made stratergic alliance with Godrej Soap, which helped to get a
larger market share.
8. • Pepsi was more successful brand than Coca-Cola which left in 1978
and returned in 1993.
• The products advertised reflected soci-economic profile of population
and disposable income level.
• In 1993 75% of TV ads were for 5 major groups of products.
• The advertising industry in India has moved from focusing on demand
creation to brand creation.
• More recent marketing initiatives since 2012 have been precisely
targeting rural consumers.
9. PRIVATISATION
• It became must on the road to progress.
• Privatisation can be described as a transfer of ownership in full or part
and the control of public sector units to private individuals or
companies.
• Main reason was the increase in external and internal debt which the
government was not able to control or repay.
• Even though privaization was resisted by the political parties, it
gained momentum after 2002.
10. Objectives
• To ease out the debt.
• To strengthen the financial position of the private sectors.
• Government could concentrate on areas like education and
infrastructure.
• To increase the performance of the private sector.
• Provide better service to the customers.
• Increasing inefficiency on the part of public sectors would not help in
achieving global standards,
11. Globalozation And The Indian Economy
• Globalization in India has led to more interaction of the country with
other nations.
• Made the country independent and self reliant in many sectors.
• Increase in the exchange of culture, technology, innovation and the
education system.
• Helped Indian economy increase of GDP which is increasing gradually.
• Foreign investment in the country.
• Indian comapnies have become global players.
12. The Indian Economy Now
• India's economy is growing drastically and is emerging as a major
force to reckon with.
• It has place itself amongst the fastest growing economy, second only t
China.
• The past two decades have seen an enormous growth in the buying
power of the consumers, major contributors been the rise in e-
commerce.
• Now possible to review the product, get a comparison with other
products and then the freedom to decide.
13. • Entertainment sector is one such sector where the scope of growth is
tremendous.
• Indian cnsumer market belongs to wide span of Middle class family,
which means that the people buying FMGC products are more in
India.
• According to the FICCI-KPMG report, the Indian economy is looking
strong with FY15 growth at 7.3%.
• The Indian Media and Entertainment Industry grew by 11.6% from
INR 1308 billion in 2016 to INR 1473 billion in 2017.
14. • The finance bill 2015 has set an optimistic road map for the Media &
Entertainment Industry. The implemenation of GST is expected to
greatly benefit the industry in the form of reduction of tax cost to
industry, doing away with dual taxation.
• Government has given its nod to the partial auctions for 135 channels
in 69 cities, which will lead to a much required boost to the radio
industry.
• While digital media is seeing extraordinary growth in the last couple
of years,traditional media provides mass appeal and reach to the
audiences.
15. • The success of IPL has led to the formation of several league format
sporting events, creating more opportunities in league management,
franchisee, broadcasting, advertising, production house to name a
few.
• India is second largest internet-enabled market with about 173
million mobile internet users in India.
• The Digital India Initiatives started by the present government
guidelines:
1. Digital Infrastructure as a Utility to every Citizen.
2. Governance & Service on Demand.
3. Digital Empowerment of Citizens.
16. • Facebook is by far the social networking platform with the widest
reach of 118 million monthly active users.
• The increase in consumption of video content is useful for the
advertisers, as now their content is dirctly uploaded on Facebook.
• The advertising industry witnessed a steady growth in the past few
years, in terms of heavy spending during national and state elections
and also significant increase in spending in e-commerce companies.
• The Advertising Industry has emerged as one of the major industries
in tertiary sector.
17. Effect of Liberalization on Employment
• The state of agricultural sector in India is majorly unorganized. In
some form or the other more than 80% of the work force lies in the
unorganized sector and only 20% of the work force works for the
organized sector.
• According to the UN report 2017 “Unemployment in India is
projected to increase from 17.7 million in 2016 to 17.8 million in 2017
and 18 million next years. In percentage terms, unemployment rate
will remain at 3.4% in 2017-18”
• The standard of level of these employees is very low as they are
casual workers.
18. • Unemployment is the status of skilled people who are not able to get
a job. Thera can be various reasons for this: getting the first job is
always tricky and crucial.
• There are also jobs with lean period- also called as seasonal
unemployment, example: tourism industry and farming sector.
• Unemployment also occurs as a result of change in economy, also
called as structural unemployment.
• The best example is 2008 recession where many people lost their
jobs.
19. Effect of Liberalisation on Lifestyle
• With the world facing drastic change, for India the most prominent
factor that contributed to this changes is Liberalisation.
• The law changed and the acceptability of foreign goods on Indian soil
brought with it the inflow of foreign culture.
• Apart from Liberalisation, the introduction of cable television network
in 1990s, where people were exposed to number of serials from
America.
• These changes have led to the change in society at a very fast pace.
20. • There is a desire in every human being to progress in life, in terms of
social, cultural or economic. Every consumer wants to improve their
status in society.
• Advertising various products is aimed to make consumers feel that it
is contributing to the change in lifestyle, thus leading to change in
status.
• The ads of majority of the products are also aimed at the middle class
and above, the consumer belonging to the lower class or lower
middle class are always struggling as the means are less and the
products are more.
