Liberalisation, Privatisation And Globalisation : An Appraisal

Question 93
CBSEENEC11008920

What does foreign international investment (FII) refer to?

Solution

FII refers to investment in Indian companies by the foreign banking and non banking institutions.

Question 94
CBSEENEC11008921

What does foreign investment include?

Solution

Foreign investment includes FDI and FII.

Question 95
CBSEENEC11008922

What was the basic problem that forced us to have a u-turn in our policies in 1991?

Solution

The basic problem that forced us to have a u-turn in our polices in 1991 was economic crisis relating to its external debt. By the end of June,1991 the country encountered an unprecedented economic crisis. The situation was so alarming that our reserves of foreign exchange were merely enough to pay for two weeks imports. New loan were not available. Large amounts were being withdrawn from the acounts of Non Resident Indians (NRIs). The crisis was further compounded by rising prices of essential goods. Industrial growth was scraping the bottom. Faith of international community in Indian economy was shaken. All these led the government to introduce a new set of policy measures which changed the direction of our developmental strategies.

Question 96
CBSEENEC11008923

State the obvious gains and im perative losses of privatisation.

Solution

(a) Obvious gains of privatisation:

(1) Privatisation promotes consumer's sovereignty.

(2) Privatisation results into high productivity.

(3) It promotes diversification of production.

(4) It leads to upgradation and modernisation of enterprises.

(b) Imperative losses:

(i) Weaker sections of society suffer deprivation in privatisation.

(ii) Social interest in ignored.

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