Understanding Liberalisation, Privatisation, and Globalisation.
                     UNDERSTANDING 
LIBERALISATION, 
PRIVATISATION, 
AND 
GLOBALISATION
INTRODUCTI
ON TO LPG
LPG stands for Liberalization, Privatization, and 
Globalization. India under its New Economic Policy 
approached International Banks for development of 
the country.
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STRUCTURAL 
REFORMS
With long-term perspective and eyeing for 
improvement of the economy and enhancing the 
international competitiveness, reforms were made 
to remove rigidity in various segments of Indian 
economy.
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STABILIZATIO
N MEASURES 
(LPG)
These measures were undertaken to correct the inherent 
weakness that has developed in Balance of Payments and 
control the inflation. These measures were short-term in 
nature. Various Long-Term Structural Reforms were 
categorized as:
• Liberalization
• Privatization and
• Globalization
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LIBERALIZATI
ON
The basic aim of liberalization was to put an end to those 
restrictions which became hindrances in the development 
and growth of the nation. 
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OBJECTIVES 
OF 
LIBERALIZATI
ON
• To increase competition amongst domestic industries.
• To encourage foreign trade with other countries with 
regulated imports and exports.
• Enhancement of foreign capital and technology.
• To expand global market frontiers of the country.
• To diminish the debt burden of the country.
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PRIVATIZATIO
N
• This is the second of the three policies of LPG. It is the 
increment of the dominating role of private sector 
companies and the reduced role of public sector 
companies. 
• In other words, it is the reduction of ownership of the 
management of a government-owned enterprise.
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OBJECTIVES 
OF 
PRIVATIZATIO
N
• Improve the financial situation of the government.
• Reduce the workload of public sector companies.
• Raise funds from disinvestment.
• Increase the efficiency of government organizations.
• Provide better and improved goods and services to the 
consumer.
• Create healthy competition in the society.
• Encouraging foreign direct investments (FDI) in India.
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FORMS OF 
PRIVATIZATIO
N
• Denationalization or Strategic Sale
• Partial Privatization or Partial Sale
• Deficit Privatization or Token Privatization
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GLOBALIZATI
ON
• It means to integrate the economy of one country with 
the global economy. During Globalization the main focus 
is on foreign trade & private and institutional foreign 
investment. It is the last policy of LPG to be 
implemented.
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 BENEFITS OF 
GLOBALIZATI
ON
• The most important advantage of outsourcing is that big 
multi-national corporate or even small enterprises can 
avail good services at a cheaper rate as compared to 
their country’s standards. The skill set in India is 
considered most dynamic and effective across the 
world. 
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