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Indian Economic Development > Liberalisation, Globalisation and Privatisation > Flashcards

Liberalisation, Globalisation and Privatisation Flashcards

1
Q

What were the reasons for economic reforms?

A 
poor performance of public sector
deficit in BOP
inflationary pressures 
fall in foreign exchange reserves of 1991
huge burden of debts
inefficient management
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2
Q

The increasing role of public sector helped indian economy to

A

achieve growth in savings
develop a diversified industrial sector
achieve food security through sustained expansion of agri output

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3
Q

To manage the economic crisis of _____-, Indian govt approached _____ and ___ for _____ dollars

A

1991, International Bank for Reconstruction and Development (World Bank) and IMF for 7 billion dollars

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4
Q

How did the international agencies expect india to open up the economy?

A

by removing restrictions on private sector
reducing role of govt in many areas
removing trade restrictions

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5
Q

What was the main aim of NEP?

A

create more competitive environment

remove barriers of entry and growth of firms

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6
Q

NEP had ______ and _______ measures

A

stabilisation and structural reform measures

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7
Q

What were the stabilisation measures of NEP?

A

short term measures to correct weakness of BOP by maintaing sufficient foreign exchange reserves and controlling inflation

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8
Q

What were the structural reform measures of NEP?

A

long term measures to improve efficiency of economy and increase international competitiveness

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9
Q

___ are the supporting pillars on which NEP is erected

A

Liberalisation, Globalisation and Privatisation

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10
Q

What is liberalisation?

A

removal of entry and growth restrictions on the private sector

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11
Q

What is globalisation?

A

integrating national economy with the world economy through removal of barriers on international trade and capital movts

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12
Q

What is privatisation?

A

transfer of ownership, management and control of public sector enterprises to the entrepreneurs in the private sector

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13
Q

What is the purpose of liberalisation?

A

unlock economic potential by encouraging investment and expansion of private sector and MNCs
introduce more competition and create incentives to increase efficiency

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14
Q

What are the economic reforms taken under liberalisation?

A 
industrial sector reforms (reduction in industrial licensing, decrease in role of public sector 17-3, de-reservation under SSI, monopolies and restrictive trade practices act)
financial sector reforms (change in role of RBI, origin of private banks, increase in limit of foreign inv, ease in expansion process)
tax reforms (reduction in taxes, reforms in indirect taxes, simplification of tax paying process)
foreign exchange reforms (devaluation of rupees, market determination of exchange rate)
trade and inv policy reforms (reduction in import duties, relaxation of import licensing system, removal of export duties,
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15
Q

What 3 industries were the indian govt exclusively reserved for?

A

defence equipments
atomic energy generation
railway transport

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16
Q

What is the MRTP Act?

A

monopolies and restrictive trade practices act made it unnecessary to seek prior approval for expansion, establishment of new undertakings, merger, amalgamations etc

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17
Q

When was the GST Act passed in the parliament?

A

passed - 29th march 2017

came into effect - 1st July 2017

18
Q

What are tax reforms?

A

reforms in govt taxation and public expenditure policies (fiscal policies)

19
Q

The limit of foreign investment was raised to __

A

51%

20
Q

The role of RBI was reduced from _____ to ________

A

regulator to facilitator of financial sector

21
Q

Direct taxes consist of taxes on ______ as well as ______

Indirect taxes are those that affect _______ through

A

income of individuals and profits of business

income and property through consumption expenditure

22
Q

Purpose of GST is

A

to generate additional revenue
reduce tax evasion
create one nation, one tax and one market

23
Q

reforms in the trade and investment policy were initiated to

A

increase international competitiveness
promote foreign inv and tech
promote efficiency of local industries and adoption of modern tech

24
Q

How can privatisation be done?

A

transfer of ownership and management

disinvestment

25
Q

What is disinvestment?

A

selling off part of the equity of PSUs to the public

26
Q

What is the purpose of privatisation?

A

improve financial discipline
facilitate modernisation
help improve performance of PSUs

27
Q

A on 13th Sept 2017, there are _____ Maharatnas, _____ Navaratnas and _____ Miniratnas

A

8, 16, 74

28
Q

In July 1991, rupees was devalued by __

A

20%

29
Q

The customs duty was reduced from ___ to ___ in the _______ budget

A

250% to 10% in 2007-08 budget

30
Q

What are the positive aspects of globalisation?

A

greater access to global markets
advanced tech
better future aspects for large industries to be active in the international market

31
Q

What are the negative aspects of globalisation?

A

compromised welfare of poor citizens
benefits are more for developed countries
increases economic disparities among nations and people

32
Q

What is outsourcing?

A

contracting out some of its activities to a third party which were earlier performed by the org

33
Q

India is a favourable location for outsourcing because of ___ and ___

A

low wage rates

availability of skilled manpower

34
Q

Prior to WTO (founded in?), ________ was established in ___with __ countries

A

General Agreement on Trade and Tariff, 1948, 23 countries

WTO was founded in 1995 (164 countries)

35
Q

What are the functions of WTO?

A 
facilitate bilateral and multilateral trade through removal of tariff/non tariff barriers
protect environment
ensure optimum utilisation of resources
enlarge production & trade of services
establish rule based trading regime
36
Q

Should India be a member of WTO?

A

no
large vol. of international trade happens btwn developed nations
developing nations are cheated

37
Q

What are the arguments in favour of economic reforms?

A

increase in rate of economic growth (5.6%-1980-91 to 6.7%-2017-18 to 7.2%-2018-19)
inflow of foreign inv (increased from 100 mil. to 73.5 bil dollars-2014-15)
rise in foreign exchange reserves (6 billion - 321 bil)
rise in X
rise in role of private sector
control on inflation (17% to 5.48%)

38
Q

What are the arguments against economic reforms?

A 
growing unemployment
neglect of agriculture
ineffective tax policy
spread of consumerism 
unbalanced growth 
ineffective disinvestment policy
low level of industrial growth (lack of infrastructural facilities, cheaper imported products, non-tariff barriers of developed)
39
Q

What is demonetisation? What is the purpose of demonetisation?

A

act of removing a currency unit of its status as legal tender (rupee 500 and 1000 on 8th Nov 2016)
tax administration measure

curb corruption
counterfeiting use of high denomination notes
accumulation of black money

40
Q

How were the less affluent affected?

A

they were just becoming part of the digital economy and were covered under Jan Dhan accounts and RuPay cards and Aadhar Enabled Payment System (AEPS) increased

41
Q

What are the types of taxes under GST?

A

central GST - levied on intra-state supply of goods and services by the Centre
state GST - levied on the intra state supply of goods and services by the state
integrated GST - levied on inter state supply of goods and services by the centre
IGST = CGST + SGST

Indian Economic Development (3 decks)

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