Six Thinking Hats is a system which describes a tool for group discussion and individual thinking involving six colored hats. "Six Thinking Hats" and the associated idea parallel thinking provide a means for groups to plan thinking processes in a detailed and cohesive way, and in doing so to think together more effectively.
In the further slides me and my team members will be explaining L.P.G (i.e. Liberalization, Privatization and Globalization) using the Six Thinking Hat Technique. The team would be more focusing on India and brushing up some parts of the world in our presentation.
7. LPG PROCESS REFORMS 1991
Fiscal Reforms:
Reduction in fiscal deficit by nearly two percentage points of GDP from 8.4 percent in
1990-91 to 6.5 percent in 1991-92.
Monetary and Financial Sector Reforms:
Reduction in Statutory Liquidity Ratio (SLR) and the Cash Reserve Ratio (CRR).
Greater competition among public sector, private sector and foreign banks and
elimination of administrative constraints.
Reforms in Capital Markets:
The Securities & Exchange Board of India (SEBI) which was set up in 1988 was given
statutory recognition in 1992
8. LPG PROCESS REFORMS 1991(...Continued)
Industrial Policy Reforms:
Industrial licensing was abolished for all projects except in 18 industries.
The public sector units were provided greater autonomy .
Trade Policy Reforms:
Positive list of freely importable items replaced by a limited negative list .
Promoting Foreign Investment:
In 1991, the government granted permission for Foreign Direct Investment (FDI) .
Foreign Investment Promotion Board (FIPB) was set up to negotiate with international firms
and approve direct foreign investment in select areas.
Steps were also taken from time to time to promote Foreign Institutional Investment (FII) in
India.
9. Education and Employment.
International Trade.
Improves efficiency and profitability.
Improves the quality of decision
making.
Domestic production is boosted.
ADVANTAGES OF LPG
10. CRITICISM OF LPG
Problems in implementation
Decline in demand for domestic products
Jobless growth
Undervaluation of public assets
Widening gap between the rich and the poor
11. SCOPE OF INNOVATION
Liberalization Privatization Globalization
• Fundamental Laws
• Revolutionized Indian
Indian Economic
System
• Job Creation
• Diversified Market
Structure
• Technical expertise
(IT Boom)
• Technological
Restructuring
• Foreign Policy Reforms
Reforms
• Magnitude of MNCs
MNCs
• Service Sector
• Efficiency
• Share Market
• Corporate Farming
• Education
Infrastructure
• Growth of Cities
• Demographic Impacts
Impacts
• KPO & BPO
• Small Scale Industries
Industries
• Expansion of the
Creative Influences
(Abstract)
• Sustainable
Development.
12. MAKE IN INDIA- The story so far
FDI inflow has increased to 29%.
Jan, 2015-Spice Group started a mobile phone manufacturing unit.
Feb,2015: Huawei opened a new R&D campus
August, 2015: Lenovo began manufacturing smart phone in Chennai.
Nov 2015: Railways inks pact with ALSTOM and GE transport.
October 2015: Boeing boost for Make in India.
14. Self reliance and self sustenance
Focus on twin pillars
Spending to be increased in all the sectors
Corruption free administration
Commitment of all concerned
Long way to go
CONCLUSION
Notas del editor
After Independent in 1947 Indian government had a main problem to develop economy and to solve this issue it followed LPG Model. The Growth Economics conditions of India in that time were not very good, because we did not have proper resources for the development, not in terms of natural resources but in terms of financial and industrial development. India had practiced a number of restrictions ever since the introduction of the first industrial policy resolution in 1948.
“You see India now-after two decades of implementation of LPG. May I know what do you think before LPG was implemented?”
Thanks you
So let us see India before LPG was implemented-
As we know that those period were known as License Raj. As a result of the restriction in the past, India’s performance in the global market has been very dismal; we have never reached even the 1% in the global market. We have vast natural resources with high-efficiency labor, but after all this we were still contributing with 0.53% till 1992.
The low annual growth rate of the economy of India before 1980, which stagnated around 3.5% from 1950s to 1980s, while per capita income averaged 1.3%. At the same time, Pakistan grew by 5%, Indonesia by 9%, Thailand by 9%, South Korea by 10% and in Taiwan by 12%.
Only four or five licenses would be given for steel, power and communications. License owners built up huge powerful empires
A huge public sector emerged. State-owned enterprises made large losses.
Infrastructure investment was poor because of the public sector monopoly.
License Raj established the “irresponsible, self-perpetuating bureaucracy that still exists throughout much of the country” and corruption flourished under this system
Private players could manufacture goods only with official licenses. The quantity of goods they were allowed to produce was determined by the license regime, not by free-market demand.
Up to 80’s government agencies had to be satisfied before private companies could produce something and, if granted, the government would regulate production
Issues with the import and export outside the country
Increase in the corruption because of governments monopoly
In 1990s the govt. of India in order to come out of the economic crisis decided to deviate from its previous economic policies and learn towards Privatization. In July 1991 when the devaluation of Indian currency took place the govt. started announcing its new economic polices one after another. Though these polices pertained to different aspects of the economic field they had one thing in common. The economic element was to orient the Indian system towards the world market it is in this context the govt. launched its new economic policy which consisted of among other things three important features. Liberalization, Privatization and Globalization.