Pros and Cons of Liberalisation , Privatisation and Globalisation (LPG) , LPG in Developed and Developing Countries

LIBERALISATION
The main aim of liberalisation was to dismantle the excessive regulatory framework which acted as a shackle on freedom of enterprise. Over the years, the country had developed a system of “license-permit raj.” The aim of the new economic policy was to save the entrepreneurs from unnecessary Harassment of seeking permission from the Babudom (the bureaucracy of the country) to start an undertaking.

Similarly, the big business houses were unable to start new enterprises because the Monopolies and Restrictive Trade Practices (MRTP) Act had prescribed a ceiling on asset ownership to the extent of Rs. 90 crores. In case a business house had assets of more than Rs.90 crores, its application after scrutiny by the MRTP Commission was rejected. It was believed that on account of the rise in prices this limit had become outdated and needed a review.

The major purpose of liberalisation was to free the large private corporate sector form bureaucratic controls. It, therefore, started dismantling the regime of industrial licensing and controls.

On April 14, 1993, the Cabinet Committee on Economic Affairs decided to remove three more items form the list of 18 industries reserved for compulsory licencing. The three items were: motor cars, white goods (which include refrigerators, washing machines, air-conditioners, microwave ovens etc.) and raw hides and skins and patent leather. In the case of cars and white goods (which include refr4igerators, washing machines, air-conditioners, microwave ovens etc.) and raw hides and skins and patent leather. In the case of cars and white goods, the basic purpose of de-reservation was to increase investment in industries in procuring cars and white goods so that the demand of the large middle class