Question

What has been the result of the policy of ‘economic liberalization’? in short​

Answer 1

Answer:

Liberalization offers the opportunity for the sector to compete internationally, contributing to GDP growth and generating foreign exchange. As such, service exports are an important part of many developing countries' growth strategies .

Explanation:

Unrestricted Flow of Capital

A lower cost of capital allows companies to undertake profitable projects they may not have been able to with a higher cost of capital pre-liberalization, leading to higher growth rates .

Attempts at liberalization in trade could lead to an increase in imports in the short run and this could cause both trade and current account deficits in countries that adopt rapid liberalization. Liberalization could increase growth rates in the short run and this also could result into higher imports than exports .

The main objectives of the liberalisation policy are as follows: To increase international competitiveness of industrial production, foreign investment and technology. To increase the competitive position of Indian goods in the international markets. To improve financial discipline and facilitate modernisation .

The term liberalisation denotes removing restrictions from certain private individual activity, typically pertaining to economic system. Commonly, liberalisation is used in the context of a government relaxing its previously imposed restrictions on economic or social policies .

Trade liberalization removes or reduces barriers to trade among countries, such as tariffs and quotas. Having fewer barriers to trade reduces the cost of goods sold in importing countries. Trade liberalization can benefit stronger economies but put weaker ones at a greater disadvantage .

Hope it was helpful. .

Thanks