Economics 1 Marks Each

Full Form of FII : Foreign Institutional Investment.

The globalization means the integration of country's economy with the world.

Liberalization means process of extending private enterprises, freedom of individual decision making and market led economic decisions.

Full Form of FDI: Foreign Direct Investment.

IMF had forced India to undertake new economic policy to solve the problem of foreign exchange crisis.

Private enterprise was considered as inevitable nuisance.

There are three main components of economic reforms :

• privatization,
• globalization and
• liberalization.

India has adopted mixed economic system.

The main problems were the economic and social development of India.

The Indian currency has become free from government control.

Disinvestment means the selling of ownership of public enterprises to private sector or selling the share of public sector enterprises to private sector.

The implementation of liberalization took place step by step. The laws were removed for producers and investors, and then the foreign investments were invited.

In India, initially the consumer goods then service sector and later on financial sectors were liberalized.

Some industries which are harmful for environment and health are set to continue licensing in India.

Order of Liberalization in India : firstly consumption sector, secondly public sector and thirdly, financial sector.

The objective of disinvestment is to raise the financial instruments of the government.

There are two phases of India's foreign policy :

• Before globalization
• After globalization.

The speed at which foreign companies invest money into market and withdraw money from market is dangerous for the economy.

The areas like banking, education, transportation, communication etc. are having private enterprises after economic reforms.

If all the shares of public sectors are sold to private sector, it is known as perfect transformation of ownership.

Privatization can be done through :

• Disinvestment.
• To reduce the restricted area of public sector,
• To establish public-private enterprises.

The process of privatization means to transfer the ownership of public enterprises to private sector.

Privatization means the process of transferring ownership of economic enterprises from public sector to private sector.

Defense, atomic energy and railway sectors are restricted after having economic reforms.