Full Chapter Summary & Detailed Notes
Key Definitions & Terms
60+ Questions & Answers
Key Concepts
Introduction
Background
Liberalisation
Privatisation
Globalisation
Indian Economy During Reforms: An Assessment
Interactive Quiz (20 Q)
Quick Revision Notes & Mnemonics
Full Chapter Summary & Detailed Notes - Liberalisation, Privatisation and Globalisation Class 11 NCERT
Overview & Key Concepts
Chapter Goal : Understand 1991 reforms background, LPG mechanism, implications. Exam Focus: Crisis causes, liberalisation areas, privatisation methods, globalisation outcomes, sector impacts. 2025 Updates: GST, FDI trends. Fun Fact: Outsourcing made India BPO hub. Core Idea: Shift mixed to competitive economy. Real-World: GST 'one nation one tax'. Ties: To previous chapter on pre-1991.Wider Scope : WTO role, disinvestment debates.
Introduction
Post-40 years planned development: Industrial base, food self-sufficiency but agriculture dependent. 1991 crisis led reforms. Depth: Appraisal process/implications. Real-Life: Mixed economy pros/cons. Exam Tip: Scholars arguments. Extended: Capitalist/socialist advantages. Graphs: None. Historical: 1991 NEP. NCERT: Direction change.
Examples: Rules hampered growth vs diversified sector.
Point: Crisis external debt/forex low.
Extended: GDP not sole measure. Errors: Success? Partial. Scope: Post-1991. Principles: Competitive. Real: Inflation high. Additional: Narayanan quote. Depth: Policies adopted. Interlinks: Sectors. Advanced: Stabilisation/structural. Symbols: None.
Background
Crisis origin 1980s inefficient management. Expenditure > revenue; borrowings unsustainable. Depth: Imports high no exports match; forex inadequate. Real-Life: No lenders willing. Exam Tip: Sources funds. Extended: Development challenges. Graphs: None. Historical: $7bn loan WB/IMF. NCERT: Conditionalities agreed.
Examples: Deficit finance banks/international.
Point: NEP liberalise/privatise/globalise.
Extended: Stabilisation short-term; structural long-term. Errors: Revenue sufficient? No. Scope: 1980s. Principles: Unsustainable. Real: Prices rose. Additional: Petroleum imports. Depth: Profligate spending. Interlinks: Reforms. Advanced: BOP weaknesses. Symbols: None.
Liberalisation
End restrictions; comprehensive 1991. Areas: Industrial deregulation, financial, tax, forex, trade. Depth: Licensing abolished except few; RBI facilitator. Real-Life: Private banks rose. Exam Tip: Reforms details. Extended: GST 2016. Graphs: None. Historical: 1980s partial. NCERT: Efficiency/competitiveness.
Examples: FII allowed; rupee devalued.
Point: Tariffs reduced; QR removed.
Extended: Corporation tax lowered. Errors: Hindrances? Major. Scope: Sectors. Principles: Deregulation. Real: FDI impetus. Additional: Simplification. Depth: Market determine prices/exchange. Interlinks: Privatisation. Advanced: Compliance better. Symbols: None.
Privatisation
Shed ownership/management government enterprises. Ways: Withdrawal/sale (disinvestment). Depth: Improve discipline/modernisation. Real-Life: Navratnas autonomy. Exam Tip: Box 3.1 examples. Extended: PSEs global players. Graphs: None. Historical: 1950s self-reliance. NCERT: FDI impetus.
Examples: Maharatnas IOC/SAIL.
Point: Autonomy managerial.
Extended: Disinvestment targets. Errors: Only loss-making? Debate. Scope: PSEs. Principles: Efficiency. Real: Privatisation wave. Additional: Clippings activity. Depth: Status granting. Interlinks: Globalisation. Advanced: Resources financial markets. Symbols: None.
Globalisation
Integration world economy; interdependence. Outcomes: Outsourcing/BPO. Depth: WTO successor GATT; rule-based trade. Real-Life: India WTO member advocates developing. Exam Tip: Box 3.2 companies. Extended: IT growth. Graphs: None. Historical: 1995 WTO. NCERT: Borderless world.
Examples: ONGC Videsh/Tata Steel.
Point: Services digitised.
Extended: Complaints subsidies. Errors: Usefulness? Questioned. Scope: Networks. Principles: Integration. Real: Call centres. Additional: Experiences Covid. Depth: Low wages/skills. Interlinks: Reforms. Advanced: Developed markets access. Symbols: Fig 3.1.
Indian Economy During Reforms: An Assessment
Three decades; GDP growth rapid but agriculture declined. Depth: Service driven; FDI/forex rose. Real-Life: Exports auto/pharma/IT. Exam Tip: Table 3.1 growth. Extended: Employment insufficient. Graphs: Table. Historical: 2012-22 data. NCERT: Positive/negative.
Examples: Reserves $413bn 2018-19.
Point: Industry slowdown; disinvestment criticised.
Extended: Fiscal limits. Errors: Benefited agriculture? No. Scope: Sectors. Principles: Assessment. Real: Infrastructure inadequate. Additional: Siricilla tragedy. Depth: Reforms criticised. Interlinks: All. Advanced: Disparities widened. Symbols: Fig 3.2.
Conclusion
Positive: Access markets/technology; negative: Disparities/inequalities aggravated. Depth: Concentrated services; agriculture/industry livelihoods millions. Real-Life: High-income consumption. Exam Tip: Recap LPG. Extended: External advice. Graphs: None. Historical: 1990s crisis. NCERT: Select areas growth.
Examples: Telecom/finance.
Point: Challenges remain.
Extended: Identity compromised. Errors: Opportunity? Debated. Scope: Global. Principles: Market-driven. Real: Inequalities deep-rooted. Additional: Activities. Depth: Welfare affected. Interlinks: All. Advanced: Players international. Symbols: None.
Summary
1991 reforms LPG: Crisis background, liberalisation deregulation, privatisation disinvestment, globalisation integration/outsourcing/WTO, assessment growth positive but sectors uneven/employment low.
Why This Guide Stands Out
Complete: All subtopics, examples, Q&A, quiz. Economics-focused. Free 2025.
Key Themes & Tips
Aspects : Crisis, LPG, impacts positive/negative.Thinkers : WB/IMF, scholars debates.Tip: Reforms explain; sectors analyze; pros/cons discuss; trends compare.
Exam Case Studies
GST, navratnas, outsourcing, WTO, disinvestment.
Project & Group Ideas
Debate globalisation threat/opportunity.
Chart BPO companies.
Key Definitions & Terms - Complete Glossary
All terms from chapter; detailed with examples, relevance. Expanded: 20+ terms.
Liberalisation
Remove restrictions economy. Relevance: Growth. Ex: Licensing abolished. Depth: Comprehensive 1991.
Privatisation
Transfer government to private. Relevance: Efficiency. Ex: Disinvestment. Depth: Autonomy navratnas.
Globalisation
Integration world economy. Relevance: Interdependence. Ex: Outsourcing. Depth: Borderless.
New Economic Policy (NEP)
1991 reforms package. Relevance: Direction change. Ex: LPG. Depth: Conditionalities WB/IMF.
Stabilisation Measures
Short-term BOP/inflation control. Relevance: Reserves/prices. Ex: Devaluation. Depth: Immediate.
Structural Reform Measures
Long-term efficiency/competitiveness. Relevance: Rigidities remove. Ex: Deregulation. Depth: Segments.
Disinvestment
Sale PSE equity public. Relevance: Modernisation. Ex: Targets annual. Depth: Undervalued critics.
Outsourcing
Services external countries. Relevance: BPO. Ex: IT/voice. Depth: Low cost/skills.
World Trade Organisation (WTO)
1995 GATT successor. Relevance: Rule-based trade. Ex: Agreements goods/services. Depth: Market access.
Goods and Services Tax (GST)
2016 indirect tax reform. Relevance: One nation one tax. Ex: Revenue/evasion reduce. Depth: Common market.
Foreign Direct Investment (FDI)
Foreign investment direct. Relevance: Inflow impetus. Ex: $30bn 2017-18. Depth: Technology.
Foreign Institutional Investors (FII)
Merchant/mutual/pension funds. Relevance: Markets invest. Ex: 74% banks. Depth: Portfolio.
Navratnas
Profitable PSEs status. Relevance: Autonomy. Ex: HAL/MTNL. Depth: Compete global.
Maharatnas
Top PSEs. Relevance: Operational freedom. Ex: IOC/SAIL. Depth: Expansion.
Miniratnas
Profit-making enterprises. Relevance: Autonomy. Ex: BSNL/AAI. Depth: Performance better.
Devaluation
Rupee value reduce foreign currencies. Relevance: Inflow increase. Ex: 1991 crisis. Depth: Market determine.
Quantitative Restrictions (QR)
Import limits. Relevance: Removed. Ex: Consumer goods 2001. Depth: Competitiveness.
Tariffs
Import duties. Relevance: Reduced. Ex: Protection domestic. Depth: Efficiency.
Balance of Payments (BOP)
External transactions. Relevance: Crisis 1991. Ex: Deficit unsustainable. Depth: Reserves low.
Foreign Exchange Reserves
Holdings foreign currency. Relevance: Increased post-reforms. Ex: $413bn 2018-19. Depth: Imports cover.
Tip: Memorize LPG components; reforms areas; positive/negative impacts; growth table. Depth: Implications. Applications: India. Errors: Full success? Uneven. Historical: 1991. Interlinks: Sectors. Advanced: WTO debates. Real-Life: GST. Graphs: Table 3.1. Symbols: Outsourcing. Coherent: Reforms.
Additional: Stabilisation vs structural. Autonomy levels. Rational debates.
60+ Questions & Answers - NCERT Based (Class 11)
Part A (1 mark short), B (4 marks medium), C (8 marks long). Based on NCERT, exercises.
Part A: 1 Mark Questions
1. When were economic reforms introduced in India?
1 Mark Answer: 1991.
2. What is NEP?
1 Mark Answer: New Economic Policy.
3. Name one stabilisation measure.
1 Mark Answer: Devaluation.
4. What is liberalisation?
1 Mark Answer: Removing restrictions.
5. Name a product still under industrial licensing.
1 Mark Answer: Alcohol.
6. Who regulates financial sector?
1 Mark Answer: RBI.
7. What is GST?
1 Mark Answer: Goods and Services Tax.
8. What is disinvestment?
1 Mark Answer: Sale of PSE equity.
9. Name a maharatna.
1 Mark Answer: IOC.
10. What is outsourcing?
1 Mark Answer: External services.
11. When was WTO founded?
1 Mark Answer: 1995.
12. GDP growth 1980-91?
1 Mark Answer: 5.6%.
13. Sector driving growth post-reforms?
1 Mark Answer: Services.
14. FDI 2017-18?
1 Mark Answer: $30 billion.
15. Forex reserves 2018-19?
1 Mark Answer: $413 billion.
16. Example export post-reforms.
1 Mark Answer: IT software.
17. Criticism reforms agriculture?
1 Mark Answer: Decelerating growth.
18. Industry slowdown cause?
1 Mark Answer: Cheaper imports.
19. Disinvestment target 2017-18?
1 Mark Answer: Rs 1,00,000 crore.
20. Fiscal policy component?
1 Mark Answer: Tax reforms.
Part B: 4 Marks Questions
1. Explain 1991 crisis background.
4 Marks Answer: 1980s inefficient; expenditure > revenue; borrowings unsustainable. Imports high no exports; forex low 2 weeks; prices rose.
2. Describe stabilisation vs structural measures.
4 Marks Answer: Stabilisation short-term BOP/inflation; structural long-term efficiency/competitiveness remove rigidities.
3. Explain industrial deregulation.
4 Marks Answer: Licensing abolished except alcohol etc.; public reserved atomic/rail; small-scale dereserved; market prices.
4. Describe financial sector reforms.
4 Marks Answer: RBI facilitator; private/foreign banks; FII allowed; branches freedom.
5. Explain tax reforms.
4 Marks Answer: Direct income/corporation reduced; indirect GST 2016 one tax/market; simplification compliance.
6. Describe foreign exchange reforms.
4 Marks Answer: Devaluation 1991 inflow; market determine rates demand/supply.
7. Explain trade/investment reforms.
4 Marks Answer: QR dismantled; tariffs reduced; licensing removed except hazardous; export duties off.
8. Describe privatisation methods.
4 Marks Answer: Withdrawal ownership/sale disinvestment; autonomy navratnas/miniratnas.
9. Explain outsourcing.
4 Marks Answer: Services external countries; BPO/call centres; IT growth; low wages/skills India destination.
10. Describe WTO role.
4 Marks Answer: 1995 GATT successor; rule-based trade; enlarge services/resources/environment protect.
11. Explain GDP growth post-reforms.
4 Marks Answer: Increased 5.6% 1980-91 to 8.2% 2007-12; service driven; agriculture declined.
12. Describe positive reforms outcomes.
4 Marks Answer: FDI/FII increase; reserves high; exports auto/IT; prices controlled.
13. Explain employment growth issue.
4 Marks Answer: Insufficient opportunities; reform-led not generated enough.
14. Describe agriculture reforms impact.
4 Marks Answer: Decelerating; investment fall; subsidy partial remove; competition international.
15. Explain industry slowdown.
4 Marks Answer: Cheaper imports; infrastructure inadequate; demand decrease.
16. Describe disinvestment criticisms.
4 Marks Answer: Assets undervalued; proceeds offset revenue not development.
17. Explain fiscal policies impact.
4 Marks Answer: Expenditure limits social; tax reductions no revenue increase; customs scope curtailed.
18. Describe globalisation pros/cons.
4 Marks Answer: Pros: Markets/technology; cons: Disparities/welfare compromised.
19. Explain navratnas policy.
4 Marks Answer: Autonomy PSEs compete global; performance better.
20. Describe WTO India role.
4 Marks Answer: Commitments liberalisation; advocates developing; subsidies complaints.
Part C: 8 Marks Questions
1. Discuss 1991 reforms background/implications.
8 Marks Answer: 1980s inefficient expenditure > revenue; borrowings unsustainable; forex low; WB/IMF loan conditionalities. NEP LPG: Stabilisation short-term BOP/inflation; structural long-term efficiency. Implications: Growth rapid service driven; but agriculture/industry slowdown; employment insufficient.
2. Analyze liberalisation major areas.
8 Marks Answer: Industrial: Licensing abolished; financial: RBI facilitator private banks FII; tax: Rates reduced GST; forex: Devaluation market rates; trade: QR/tariffs removed licensing off. Aim competitiveness/efficiency.
3. Examine privatisation methods/impacts.
8 Marks Answer: Withdrawal/sale disinvestment; autonomy navratnas/maharatnas/miniratnas. Impacts: Discipline/modernisation/FDI; but undervalued/loss government; proceeds not development.
4. Discuss globalisation process/outcomes.
8 Marks Answer: Integration interdependence; outsourcing BPO/IT; WTO rule-based. Outcomes: Services growth; but disparities; markets access limited developed.
5. Analyze economy performance post-reforms.
8 Marks Answer: GDP 5.6% to 8.2%; service high; agriculture decline; industry fluctuation. Positive: FDI/reserves/exports; negative: Employment low; infrastructure inadequate; fiscal limits.
6. Examine agriculture reforms impacts.
8 Marks Answer: Investment fall infrastructure; subsidy partial remove cost up; duties low MSP low QR lift competition; shift cash crops food pressure.
7. Discuss industry reforms challenges.
8 Marks Answer: Slowdown imports cheap; investment infrastructure low; vulnerable global; markets access barriers non-tariff.
8. Analyze disinvestment/fiscal policies.
8 Marks Answer: Disinvestment targets achieved but undervalued/loss; proceeds offset not PSEs/social. Fiscal: Tax reduce no revenue up; customs curtailed; expenditure limits welfare.
9. Examine WTO usefulness India.
8 Marks Answer: Rule-based equal opportunities; but trade developed; subsidies complaints; access denied developed markets.
10. Discuss globalisation debates.
8 Marks Answer: Opportunity markets/technology/players; threat disparities/welfare/identity; developed expand; inequalities aggravated.
11. Analyze outsourcing benefits/challenges.
8 Marks Answer: Benefits: Employment BPO/IT; low cost/skills. Challenges: Sustainable? Skills acquire; developed jobs loss.
12. Examine GST role tax reforms.
8 Marks Answer: 2016; one tax/market; revenue up evasion reduce; simplification compliance.
13. Discuss navratnas/maharatnas policy.
8 Marks Answer: Autonomy operational/financial/managerial; compete global; performance better; expansion markets/resources.
14. Analyze positive reforms global footprint.
8 Marks Answer: Companies expanded: ONGC/Tata/HCL/Dr Reddy's; operations multiple countries; employment abroad.
15. Examine employment sustainability BPO.
8 Marks Answer: Skills communication/IT; but sustainable? Regular income acquire.
16. Discuss reforms agriculture subsidies.
8 Marks Answer: Remove competitive? But how done; groundnut example losses.
17. Analyze power reforms impacts small industries.
8 Marks Answer: Tariff rise; wages cut; Siricilla suicides; suggestions revive.
18. Examine reforms social justice/welfare.
8 Marks Answer: Inequalities aggravated; high-income benefit; disparities nations/people.
19. Discuss GDP growth table interpretation.
8 Marks Answer: 1980-91 5.6%; post higher but agriculture low; services up; GVA 2021-22.
20. Analyze public/private coexistence merits/demerits.
8 Marks Answer: Dual system: Merits competition/efficiency; demerits inequality/access.
Tip: Relate crisis reforms; areas explain; impacts positive/negative; debates discuss.
Key Concepts - In-Depth Exploration
Core ideas with examples, pitfalls, interlinks.
Economic Crisis 1991
Forex low/debt high. Deriv: Reforms. Pitfall: Internal? 1980s. Ex: Borrowings. Interlink: BOP.
Liberalisation
Deregulation sectors. Deriv: Efficiency. Pitfall: Hindrances remain? Ex: Licensing off. Interlink: Trade.
Privatisation
Ownership shift. Deriv: Modernisation. Pitfall: Loss-making only? Ex: Disinvestment. Interlink: Autonomy.
Globalisation
Integration. Deriv: Outsourcing. Pitfall: Disparities? Ex: WTO. Interlink: FDI.
GST
Tax reform. Deriv: Market common. Pitfall: Evasion zero? Ex: 2016. Interlink: Indirect.
Disinvestment
Equity sale. Deriv: Resources. Pitfall: Undervalued? Ex: Targets. Interlink: PSEs.
Outsourcing
Services external. Deriv: Employment. Pitfall: Sustainable? Ex: BPO. Interlink: IT.
WTO
Trade rules. Deriv: Access. Pitfall: Subsidies. Ex: 1995. Interlink: Agreements.
Advanced: Growth analyze. Pitfalls: Uneven benefits. Interlinks: Sectors. Real: GST. Depth: Implications. Examples: Daily. Graphs: Table. Errors: Full liberal? Partial. Tips: Pros/cons; trends compare.
Extended: Rational skills. Pitfalls: Biases. Common: LPG. Principles: Competitive. Advanced: Conditionalities. Coherent: Contexts.
Introduction - Detailed Guide
Post-planned, crisis, reforms (sim 4+ pages equiv).
Post-Planned
Industrial base/food self. Deriv: Agriculture dependent. Ex: 40 years. Depth: Mixed economy.
Crisis
1991 BOP. Deriv: Reforms. Ex: Debt/forex low. Depth: Implications appraisal.
Reforms
Direction change. Deriv: Competitive. Ex: Scholars argue. Depth: GDP not all.
Tip: Arguments explain. Depth: Pros/cons. Examples: Rules. Graphs: None. Advanced: NEP.
Principles: Appraisal. Errors: Definitions. Real: Crisis.
Extended: Unit focus. Numerical: None.
Background - Detailed Guide
Origin, unsustainable, loan (sim 4+ pages equiv).
Origin
1980s management. Deriv: Expenditure high. Ex: Deficit. Depth: Sources.
Unsustainable
Borrowings/prices. Deriv: Forex low. Ex: 2 weeks. Depth: No lenders.
Loan
$7bn WB/IMF. Deriv: Conditionalities. Ex: Liberalise. Depth: NEP LPG.
Tip: Causes list. Depth: Stabilisation/structural. Examples: Petroleum. Graphs: None. Advanced: BOP.
Principles: Crisis. Errors: Revenue? Low. Real: Inflation.
Extended: Challenges. Numerical: None.
Liberalisation - Detailed Guide
End restrictions, areas (sim 4+ pages equiv).
End Restrictions
Hindrances remove. Deriv: Comprehensive 1991. Ex: 1980s partial. Depth: Growth.
Areas
Industrial/financial/tax/forex/trade. Deriv: Efficiency. Ex: Licensing off. Depth: RBI/FII.
GST
2016 reform. Deriv: Market common. Ex: Revenue/evasion. Depth: Simplification.
Tip: Details explain. Depth: Implications. Examples: Devaluation. Graphs: None. Advanced: Compliance.
Principles: Deregulation. Errors: Full? Ongoing. Real: Banks.
Extended: QR/tariffs. Numerical: None.
Privatisation - Detailed Guide
Shed ownership, methods (sim 4+ pages equiv).
Shed Ownership
Government to private. Deriv: Discipline. Ex: Sale. Depth: FDI.
Methods
Withdrawal/disvestment. Deriv: Modernisation. Ex: Targets. Depth: Autonomy.
Navratnas
Status PSEs. Deriv: Compete. Ex: HAL. Depth: Global.
Tip: Examples box. Depth: Debates. Examples: Maharatnas. Graphs: None. Advanced: Resources.
Principles: Efficiency. Errors: Loss only? No. Real: Targets.
Extended: Clippings. Numerical: None.
Globalisation - Detailed Guide
Integration, outsourcing, WTO (sim 4+ pages equiv).
Integration
World economy. Deriv: Networks. Ex: Interdependence. Depth: Borderless.
Outsourcing
Services external. Deriv: BPO. Ex: IT. Depth: Digitised.
WTO
Trade organisation. Deriv: Rules. Ex: 1995. Depth: Services.
Tip: Outcomes explain. Depth: India role. Examples: Tata. Graphs: None. Advanced: Complaints.
Principles: Integration. Errors: Benefits all? No. Real: Call centres.
Extended: Experiences. Numerical: None.
Indian Economy During Reforms: An Assessment - Detailed Guide
Growth, positive, negative (sim 4+ pages equiv).
Growth
Rapid GDP. Deriv: Service driven. Ex: Table 3.1. Depth: Fluctuations.
Positive
FDI/reserves/exports. Deriv: Control prices. Ex: $413bn. Depth: Successful exporter.
Negative
Employment low; agriculture/infrastructure. Deriv: Disparities. Ex: Subsidy remove.
Tip: Sectors analyze. Depth: Criticisms. Examples: Siricilla. Graphs: Table. Advanced: Fiscal.
Principles: Assessment. Errors: Balanced? Uneven. Real: Impacts.
Extended: Debates. Numerical: Growth %.
Interactive Quiz - Master Liberalisation, Privatisation and Globalisation
20 MCQs; 85%+ goal. Reforms, LPG, impacts.
Start Quiz
Quick Revision Notes & Mnemonics
Introduction
Crisis 1991; NEP LPG; direction change.
Background
1980s inefficient; borrowings; WB/IMF conditionalities.
Liberalisation
Deregulation industrial/financial/tax/forex/trade; GST.
Privatisation
Disinvestment/autonomy; navratnas/maharatnas.
Globalisation
Integration/outsourcing/WTO; BPO/IT.
Assessment
Growth service; positive FDI; negative employment/agriculture/industry.
Mnemonics: LPG (Liberalisation Privatisation Globalisation). Areas "Industrial Financial Tax Forex Trade" (IFTFT). Positive "Growth FDI Reserves Exports" (GDRE). Negative "Employment Agriculture Industry Fiscal" (EAIF).
Tip: Reforms explain; impacts analyze; pros/cons discuss; table interpret.
