Question

What do you mean by opening up of the Indian economy?

Answer 1

Hi there

The economic liberalisation in India refers to the economic liberalisation, initiated in 1991, of the country's economic policies, with the goal of making the economy more market and service-oriented and expanding the role of private and foreign investment.


In summary, opening up an economy means, letting our businesses and markets interact with the outside world and do trade with them.



Thank You

Answer 2

Our economies work in a somewhat similar fashion. When an economy is very fragile and nascent, governments are very protective. They control how external investments are made, who controls their companies, what they produce, what they export/import etc. In healthy societies, the economy eventually grows out of the government's womb and gets full freedom to operate independently. This is what happening in Singapore, Western Europe and the US. Like a protective mother, the governments might admonish and child their businesses, but take care not to interfere too much into their internal working.

However, in India our mother government kept the economy baby wrapped in the swaddle cloth for its first 44 years of existence. The baby protested that it is an adult, but the government still thought it was too weak to face outsiders. Government controlled how the businesses should operate, how they should hire, what they should export/import, how much they should borrow and so on. Stifled by the government,  our businesses started becoming mummified ghosts