(b) To issue licenses to private sector units in those industries where earlier it was restricted.
(c) To initiate competition in those industries where there was monopoly of public sector enterprise.
(d) To promote the investment of foreign companies in the area of business and technology in the country.
(e) To change the standard of living of the people of India by providing them opportunity to buy international quality goods, which are made in India with the help of foreign collaboration?
(1) To help in preventing unfair, illegal operations.
Q. 14. State the meaning of liberalization.
Or Explain liberalization
Ans. Liberalization: The general meaning of the term liberalisation is to open the strict regulations over the industries. It includes several steps like issuing licences to private sector units, free sale of essential commodities in the market, raising of investment limits in business houses, relaxation of MRTP Act, welcoming foreign companies to invest in the country.
The liberalization policy came into existence in 1991 though the idea was initiated by our Late Prime Minister Shri Rajiv Gandhi as the public sector enterprises were becoming sick.
Q. 15. What are the essential conditions for successful globalization?
Ans. There are however, some essential conditions to be satisfied on the part of the domestic company as well as the firm for successful globalization of the business.
(a) Business Freedom : There should not be unnecessary government restrictions which come in the way ofglobalisation. That is why the economic liberalisation is regarded as a first step forward facilitating globalisation.
(b) Facilities The extent, to which an enterprise can develop globally from home country-base depends on thefacilities available like the infrastructural facilities.
(c) Government Support: Government support may take the form of policy and procedural reforms, development of common facilities like infrastructural facilities, Research and development support financial market reforms and so on.
(d) Resources : Resource is one of the important factors which often decides the ability of a firm to globalise. Resourceful companies may find it easier to thrust ahead in the global market.
(e) Competitiveness: The competitive advantages of the company are a very important determinant of success in global business.
(f) Orientation A global orientation on the part of business firms and suitable globalisation strategies is essential for globalisation.
16. Discuss about some merits of globalisation.
Ans. Some merits of globalization are as under:
(a) It helps in viewing the whole world as one market.
(b) In terms of economic welfare, globalization refers to the unique economically independent international environment.
(cJ It helps in earning more profits through export business than through domestic business.
(d) The government provides merits, incentives, royalties, tax rebates to the export oriented firms.
(e) When the population of the host country is large, it provides more demand and growth opportunities to the entrant firms.
Q. 17. Explain the meaning and concept of liberalizations.
Or What are the objectives of liberalization?
Or What is liberalization? Write the main characteristics of liberalization.
Ans. Meaning of Liberalization : The general meaning of the term liberalization is to dismantle
the strict and excessive regulatory framework over the industries. It includes several steps like issuing license to private sector units, free scale of essential commodities in the markets, raising of investment limits in business houses, relaxation of MRTP Act, welcoming foreign companies to invest in country.
This idea was initiated by the Late Prime Minister of India Shri Rajiv Gandhi, as the public sector enterprises were becoming sick.
This policy came into existence in 1991.
Objectives of Liberalization
1. To free the industries from excessive regulatory pressure.
2. To issue license to private sector units in those industries where earlier it was restricted.
3. To initiate competition in those industries where there was monopoly of public sector enterprise.
4. To promote the investment of foreign companies in the area of business and technology in the country.
5. To change the standard of living of the people of India by providing them opportunity to buy international quality goods, which are made in India with the help of foreign collaboration?
6. To help in preventing unfair, illegal operations.
The basic need ofliberalisation of economy was to provide the Indian society with a comfortable life style and international quality of goods at the affordable prices. The big business houses were unable to start new enterprises due to the limits imposed byMRTPAct, so under the industrial policy of 1991, industrial licensing was abolished (br all projects except (or 18 Industries. This limit hs been further reduced to 6. The Licenses are compulsory only for the industries, which are of strategic importance to the country.
The industries for which license is necessary are:
(i) Distillation and brewing of alcoholic drinks.
(ii) Cigars and cigarettes made of tobacco and manufactured tobacco substitutes.
(iii) Electronic aerospace and defense equipments, all types.
(iv) Industrial explosives.
(v) Hazardous chemicals.
(vi) Drugs and Pharmaceuticals.
Principle Measures Initiated by Government
1. Cement was decontrolled and many licenses were issued to private sector units.
2. Share of free sale of sugar was increased to help sugar industry.
3. Ceiling of asset limit on big business houses was raised from 20 crores to 100 crores.
4.94 drugs were delicensed and 27 industries were brought out of the preview of MRTP Act.
5. Electronic industry was freed from the restriction of MRTP Act. Foreign firms were encouraged to enter into this area.
6. A scheme of broad binding was introduced. This implies that the firms are free to produce a range of commodities within the overall capacity.
Main Characteristics of Liberalization
In India the policy of liberalization was started for the very first time in the year 1923. And from then onward it continued in this or that way. Recently the central government adopted the principle of liberalization in the year 1991. Now all round development is in vogue. The chief characteristics of liberalization are as follows:
(i) The policy of liberalization adheres to the principle of laissez-faire, as it is a policy of non-interference by the governmental machinery.
(ii) In the process of liberalization state should not intervene in economic affairs, except to break up a monopoly.
(iii) Liberalization works on the theory of ‘laissez-faire et laissez-passer’ meaning leave the individual alone and let commodities circulate freely.
(iv) Fresh initiatives are taken in the policy of liberalization within the country and in overseas trading. The information technology becomes a firm tool in the process. The country becomes a hub of IT revolution.
To upbring the desired results the
government announces Exam policy to make task effective.
In the light of this statement the new Exam policy was announced by the Indian government and also proposed the setting up of Free Trade Zones (FTZs).
(vi) In it liberation is made of import regime by removing Qualitative Restrictions (QRs) on import of a wide range of consumer goods, agricultural products and textile items.
(vii) In liberalization many government undertakings become a part of privathation. The civil Aviation Ministry made a proposal to privatize the airports of Delhi, Mumbai, Kolkata, Chennai and Bangalore on a thirty-year lease.
(viii) For the implement of liberalization many a time government has to establish a new department as the Department of Disinvestment. Sometimes a commission may be established. This Disinvestment Commission may not be a statutory one and its recommendations are not binding.
Q. 18. What do you mean by globalisation? Discuss in detail.
Or What are tbe parameters of globalisation?
Or What is globalisation? Write any three advantages of globalisation.
Ans. Meaning of Globalisation : Globalisation means treating the whole place as one market. It
is an important element in the overall economic reforms by the government. Its main purpose or mission is the integration of Indian economy with the world economy. It means the uninterrupted flow of trade, capital and technology across the international frontiers.