Meaning of Liberalization, Privatization and Globalization (LPG)

Meaning of Liberalization, Privatization and Globalization (LPG)

The triple pillars of New Economic Policy are Liberalization, Privatization and Globalization (LPG)

Liberalization: Liberalization refers to removal of relaxation of governmental restrictions in all stages in industry. Delicensing, decontrol, deregulation, subsidies (incentives) and greater role for financial institutions are the various facets of liberalization.

Privatization: Privatization means transfer of ownership and management of enterprises from public sector to private sector. Denationalization, disinvestment and

opening exclusive public sector enterprises to private sector are the gateways to privatization.

Globalization: Globalization refers to the integration of the domestic (Indian) economy with the rest of the world. 

Import liberalization through reduction of tariff and non-tariff barriers, opening the doors to Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI) are some of the measures towards globalization.