Change and Development in Rural Society

Change and Development in Rural Society


Write a brief essay on liberalisation.


I. Meaning and definition of liberalisation.

The process of liberalisation is closely related to globalisation. Liberalisation is the economic content of globalisation. It is a process under which a highly regulated economy is transformed into an outward-looking economy.

After adoption of globalisation and liberalisation internal or domestic economy is liberalised through deregulation and decontrolling. The dominance of the state in most spheres of activity declines and gives way to private enterprises and companies. The privatisation of commerce and industry takes place by dismantling public sector units.

II. Philosophy and ideology behind liberalisation.

(i) The idea of liberalisation is essentially based on the thinking that the economy and society will be much better by reducing the state intervention. It is popularised by the slogan, Less State, Better State.

(ii) Liberalisation policy emphasises the efficiency aspect of economy. Private enterprises are considered more efficient than the public sector undertakings.

III. Liberalisation in India.

(i) First Phase of Liberalisation (1991 -1994)

The process of globalisation and liberalisation are more predominant in the contemporary world. Under such situation, our country is also facing challenges of these processes. A significant transformation has taken place in India since April 1991. Our country moved from a highly regulated and inward-looking to an outward-looking economy. The dominance of the state in most spheres of activity is giving way to private enterprises.

The system of regulations, licences, permits etc. declined. The quota permit raj is ending since 1991 day by day. From 1991 numerous structural changes have been introduced in economy. The first phase of reforms (1991-1994) focussed on the dismantling of controls and regulations in trade and industry. Taxes and tariffs were lowered. All these steps created a conducive climate for private investments both domestic and foreign.

(ii) Second Phase of Liberalisation in India.

The process of liberalisation and privatisation has further been accelerated in

India during the second phase of reforms. Two major developments in this phase are encouraging more to this process.

(a) More and more foreign direct investment in India and

(b) Downsizing the public (or government owned) sector.

From 1 April, 2001, all quantitative restrictions have been removed and the market is now open for imported products. Disinvestment in public sector undertaking has not only been inititated, but several corporations have already been sold to private enterprises.

IV. Evaluation of liberalisation in India.

(i) Bright side or positive results.

(a) Our country has now completed the first post liberalisation decade with satisfactory growth rates.

(b) Inflation has been contained in the post-liberation period.

(c) Industry is no longer protected from external forces.

(d) More recently, the breakthrough in Information Technology (IT) sector has proved skills of Indian professionals who are in great demand in developed countries of the world. It is expected than IT-related services would give boost to the economy in the years to come.

(ii) Dark Side or Negative Results

(a) Poverty continues to be one of almost important challenges in after 13-14 years of the beginning of liberalisation in India. Around 26.10 percent of the population is still below the poverty line.

(b) Unemployment is still a burning problem before India. In fact, situation with regard of employment continued to be grim. During the past 14-15 years, more retrenchment from jobs has taken place because companies have reduced their size or merged to face the rigour of competition. This is happening when the Indian economy is not able to generate suffcient jobs.

(c) In the era of liberalisation full employment, universal literacy, primary education (free and compulsory for all), health care and rising the quality of life for all citizens are equally challenging tasks to accomplish.

(d) Handicrafts and household industries are adversely being affected due to liberalisation. Economic liberalisation has affected this sector, which is threatened because of the entry of mechanised products and mass producers of these items in the local markets.

(e) Privatisation is affecting women in several ways. It has already started reducing employment opportunities due to introduction of sophisticated technology both in agriculture and industry.

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