1. Background – 1991 Crisis
In 1991, India faced:
- High fiscal deficit.
- Low foreign exchange reserves.
- High inflation.
हिंदी: 1991 में भारत गंभीर आर्थिक संकट में था –
तभी से नए reform शुरू हुए जिन्हें LPG reforms कहते हैं।
2. Liberalisation
Liberalisation means reducing government controls and regulations in the economy:
- End of Licence Raj in many industries.
- Removal of many restrictions on production, investment and trade.
- Encouraged private sector participation.
3. Privatisation
Privatisation means:
- Transferring ownership/management of public enterprises to private sector OR
- Reducing government stake and increasing private stake.
- Encourages efficiency and competition.
हिंदी: Privatisation = सरकार कुछ कंपनियों में अपनी भागीदारी घटाती है
या पूरी तरह निजी क्षेत्र को सौंप देती है – ताकि efficiency बढ़े।
4. Globalisation
Globalisation = increasing integration of the domestic economy with the world:
- Increase in foreign trade (imports + exports).
- Entry of foreign companies (FDI, MNCs).
- Freer movement of goods, services, capital and sometimes labour.
हिंदी: Globalisation = दुनिया की अर्थव्यवस्थाओं का आपस में जुड़ना –
trade, investment और technology sharing के ज़रिए।
5. Impact of LPG Reforms (Short NDA View)
Positive:
- Higher growth rate of GDP.
- Expansion of services sector (IT, telecom, banking).
- Increase in foreign investment and trade.
- Rising inequality.
- Pressure on small industries.
- Greater dependence on global markets.
📘 Practice Questions (NDA Style)
1. The economic reforms in India popularly known as LPG began in:
a) 1969 b) 1975 c) 1985 d) 1991
2. Liberalisation mainly refers to:
a) Increase in government control
b) Reduction in government restrictions
c) Nationalisation of banks
d) None of these
3. Privatisation means:
a) Increasing government ownership
b) Reducing private ownership
c) Increasing role of private sector in ownership/management
d) Closing all public sector units
4. Globalisation is mainly associated with:
a) Isolating domestic economy
b) Integration with world economy
c) Decreasing foreign trade
d) Closing borders
5. LPG stands for:
a) Liberalisation, Privatisation, Globalisation
b) Labour, Production, Growth
c) Land, Power, Gold
d) Liberalisation, Public sector, Growth
a) 1969 b) 1975 c) 1985 d) 1991
2. Liberalisation mainly refers to:
a) Increase in government control
b) Reduction in government restrictions
c) Nationalisation of banks
d) None of these
3. Privatisation means:
a) Increasing government ownership
b) Reducing private ownership
c) Increasing role of private sector in ownership/management
d) Closing all public sector units
4. Globalisation is mainly associated with:
a) Isolating domestic economy
b) Integration with world economy
c) Decreasing foreign trade
d) Closing borders
5. LPG stands for:
a) Liberalisation, Privatisation, Globalisation
b) Labour, Production, Growth
c) Land, Power, Gold
d) Liberalisation, Public sector, Growth
Answers:
1 – d) 1991
2 – b) Reduction in government restrictions
3 – c) Increasing role of private sector in ownership/management
4 – b) Integration with world economy
5 – a) Liberalisation, Privatisation, Globalisation
1 – d) 1991
2 – b) Reduction in government restrictions
3 – c) Increasing role of private sector in ownership/management
4 – b) Integration with world economy
5 – a) Liberalisation, Privatisation, Globalisation
Quick Recap | सार
Now you should be able to:
- Recall the most important ideas of this topic.
- Solve typical NDA-style questions from this chapter.
- Spot and avoid common traps used in competitive exams.
Self-check: 3–4 random questions उठा कर देखिए – अगर आसानी से हो रहे हैं, तो chapter strong है।
Common Exam Mistakes | आम गलतियाँ
- Concept ठीक से clear न करना और सीधे रटने की कोशिश करना।
- Question पूरी तरह पढ़े बिना answer mark कर देना।
- Figures, dates, या formulas को last step में verify न करना।
NDA में smart strategy यह है कि आसान वाले सवाल पहले, doubtful बाद में – और silly mistakes से बचना सबसे ज़रूरी है।