Chapter 3 - economic reforms Flashcards
what is liberalisation?
removing restrictions and opening up various sectors of the economy by giving freedom to invest.
what is privatisation?
conversion of government companies to private companies.
what is globalisation?
integrating the economy of the country with the world economy.
Expand - i) IBRD:
ii) GATT:
i) international banks for reconstruction & development
ii) general agreement on trade and tariffs
what is the meaning of direct tax ?
incidence & impact of taxation falls on the same person.
who regulates the financial sector?
RBI (reserve bank of India)
what is outsourcing?
company hires a regular service from external sources, mostly other countries.
what is industrial licensing?
its a system where every entrepreneur has to get permission from the government to start a firm, close a firm, decide number of goods to be sold, etc.
four objectives of trade policies
> dismantle quantitative restrictions on import
reducing tariffs
removal of export duties
removal of licensing procedure on imports
What is disinvestment?
sale of part of equity shares from a public sector enterprise to the public, it is a form of privatisation.
what are the services of outsourcing?
> legal advice
online teaching
advertisement
computed services
what is fiscal policy ?
policy of the government regarding taxation and public expenditure. fiscal policy includes public revenue and expenditure, tax revenue includes direct tax and indirect tax.
eg - direct tax - wealth, income & cooperatives tax
indirect tax - GST
background of economic reforms-
> there was a financial crisis in 1980. to introduce policies, the government needed funds, the expenditure>income so they took loans to balance deficit. the developmental program required lots of money, they increased prices on essential goods. they needed to use remaining balance in an efficient manner. they took loans from other countries. all this led to less finance in the country. they turned to IMF & IBRD - gave $7 billion. they expected India to, liberalise, privatise and globalise.
write short note on WTO
world trade organisation -
> establish rule based trading system between no. of countries
> protect the environment
> optimum use of natural resources
> enlarge production
they aim to facilitate international trade (removal of tariffs )
write short note on outsourcing
outsourcing means hiring services from external sources, mainly outside the country. ( give eg.)
it has increased over the years due to the internet and telecommunications. it helps with employment bc of low wage and skilled labourers in india. morden technologies are spread throughout the world.
