Lpg in India Liberlization Privatization Globalization
Appendix – I LPG and its Impact on India Liberalization, Privatization and Globalization (LPG) have become dominant forces shaping societies and economies the world over. These three processes are interrelated. Globalized economies are likely to be more privatized and liberalized economies. Rapid growth and poverty reduction in China, India, and other countries that were poor 20 years ago, has been a positive aspect of Liberalization Privatization and Globalization (LPG). India opened up the economy in the early nineties following a major crisis that led by a foreign exchange crunch that dragged the economy close o defaulting on loans.
The response was a slew of Domestic and external sector policy measures partly prompted by the immediate needs and partly by the demand of the multilateral organizations. The new policy regime radically pushed forward in favor of a more open and market oriented economy. One of the major consequences of globalization, privatization and liberalization is the acceleration in Foreign Direct Investment flows. While Foreign Direct Investment has been increasing for sometime among the developed triad countries, in recent years it has spread to other parts of he world, especially to the giant emerging economies.
Lpg in India Liberlization Privatization Globalization Essay Example
The privatization and liberalization policies pursued by these emerging economies have created new opportunities for Foreign Direct Investment. International investors now face difficult problems such as choosing countries, evaluating risk-return relationships and assessing profitability in private and public sectors. Financial Services Sector has gained momentum since LPG and has shown major growth in the following aspects: 1) Disinvestment, PPP: In order to make the process of globalization smooth, rivatization and liberalization policies are moving along as well.
Under the privatization scheme, most of the public sector undertakings have been/ are being sold to private sector. Hence, PPP (Public Private Partnership), BOT (Build, Operate and Transfer) models are new areas developed for financial services. 2) Dismantling of The Industrial Licensing Regime: At present, only six industries are under compulsory licensing mainly on accounting of environmental safety and strategic considerations. Liberal policies require more prudent and cautious approach by the ndustry and hence provides more areas of servicing such as due diligence, social cost benefit analysis. ) Liberal FDI Policies: The Government has put in place a liberal and transparent foreign investment regime where most activities are opened to foreign investment on automatic route without any limit on the extent of foreign ownership. Some of the recent initiatives taken to further liberalize the FDI regime, inter alias, include opening up of sectors such as Insurance. This has given growth to consulting opportunities in the new and growing sectors and also intermediation