briefly explain the important areas of liberalisation
Answers
Answer:
Deregulation of Industrial sector.
(b) financial sector reforms.
(c) Tax reforms.
(d) Reforms in Trade and Investment
Detailed Answer :
Liberalization is the loosening of government regulations in a country, so that, private sector companies are allowed to operate business transactions with lesser restrictions. Major reforms under liberalization are categorized as :
(a) Industrial sector reforms which include
(i)Contraction of public sector industries.
(ii) Abolition of industrial licensing.
(iii) Dereservation of production areas for all scales of business.
(b) Fiscal reforms which include
(i) Reduction in rate of indirect taxes.
(ii) Simplification of income tax structure.
(iii) Moderation of overall tax regime.
(c) Financial sector reforms which include
(i) Reserve Bank of India’s role changed from regulator to facilitator.
(ii) Opening of Banking sector for private sector.
(d) Trade reforms which include
(i) Abolition of import quota.
(ii) Abolition import licensing.
(iii) Withdrawal of export duty.
(iv) Reduction in tariff rates.
(e) Foreign Exchange reforms which include.
(i) Devaluation of rupee.
(ii) Determination of foreign exchange rate by market forces of demand and supply.
Explanation:
The important areas of liberalization:
- Liberalization is the emission of government inhibition in areas of monetary policies. It is mostly used as a monetary term.
- There is a decrease in the inhibition of international capital and trading.
- There are various reforms that are categorized under liberalization such as an industrial sector reform. It includes the deflation of public sector industries and the alleviation of manufactured licensing.
- Financial reforms include a decrease in the price of indirect taxes. Restraint of overall tax system.
- Business reforms include the RBIs role which has been changed from regulator to facilitator. Reopening of banking locality for the private sector.
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