General Knowledge
LPG Reforms: Liberalisation, Privatisation and Globalisation
Understand the 1991 economic reforms and the meaning of the three core terms.
Study progress
1. Background
India introduced major economic reforms in 1991 in response to serious macroeconomic and external-sector pressures.
2. Liberalisation
Reduction of unnecessary controls and restrictions to give greater scope to market forces and private activity.
3. Privatisation
Greater role for private participation and changes in the ownership/management role of the public sector.
4. Globalisation
Greater integration of the Indian economy with the world economy through trade, investment, technology and services.
5. Exam Traps
Liberalisation is about reducing controls; privatisation is about the role/ownership of the private sector; globalisation is about international integration.
Memory Tricks & Quick Recall
LPG = Less control → Private role → Global connection. Think: Liberalise rules, Privatise role, Globalise links.