Lpg in India Liberlization Privatization Globalization Assignment

Lpg in India Liberlization Privatization Globalization Assignment Words: 741

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 to 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 the world, especially to the giant emerging economies.

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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, privatization 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 industry 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 services such as foreign transaction services have grown significantly. ) Non Resident Indians’ Investments: The general policy and facilities for foreign direct investment as available to foreign investors/ Companies are fully applicable to NRIs as well. In addition, Government has extended some concessions specially for NRIs and overseas corporate bodies having more than 60% stake by NRIs. This has lead to growth in fund management and wealth management services for NRIs. 5) Banking: Private sector banking has grown substantially and we have seen many new generation modern banks in India. ) Strategic Consulting: Wide-ranging financial sector reforms in the banking, capital markets, and insurance sectors, including the deregulation of interest rates, strong regulation and supervisory systems, and the introduction of foreign/private sector competition have triggered the requirement of strategic consulting. 7) Foreign Exchange: Forex inflow has grown significantly and forex intermediation, management and hedging services are rising. MCS-SX has seen new derivatives in foreign currencies. ) Commodity Markets: Commodity transactions are more liberal and have introduced new products such as futures, options in Indian market. Commodity procurement and trade has also witnessed paradigm shift in the processes. ITC’s e-chaupal and Warna-wired village are bright examples for this. For over a century the United States has been the largest economy in the world but major developments have taken place in the world economy since then, leading to the shift of focus from the US and the rich countries of Europe to the two Asian giants- India and China.

Economics experts and various studies conducted across the globe envisage India and China to rule the world in the 21st century. India, which is now the fourth largest economy in terms of purchasing power parity, may overtake Japan and become third major economic power within 10 years. Questions: 1) After LPG what growth has taken place in the financial services sector in India? (Oct. 08) ———————– [pic]

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Lpg in India Liberlization Privatization Globalization Assignment. (2019, May 19). Retrieved March 28, 2024, from https://anyassignment.com/sociology/lpg-in-india-liberlization-privatization-globalization-assignment-51455/