Question

What is liberalisation ? Describe any four affect of liberabisation on the indian economy?

Answer 1

liberalization refers to frame the Indian business and industry from all unnecessary government controls and registrations so that they can operate more freely next time the Indian companies have been liberal in the following ways removal of industrial licensing accepting few be freedom and taking decision regarding expansion and contraction of business activities freedom to fix the price of goods and services simplifying import and export procedure

Answer 2

In simple term, liberalisation of an economy means deregulating and delicensing of economic activities. It reduces government interfence. Private sectors are free to take up any business and operate freely. Export/import is made simpler through FDI reforms and so on. Indian economy got liberalised after the 1991 economic reforms.

Both good and bad effects of it

increases competition in the economy

govt. Companies compete with private ones,

Free market of demand/supply

Huge companies can over shadow small ones, eg USA company operating in India can hamper the domestic company of the same product etc

more and more sectors become open to private players. Eg recently govt allowed private firms to manufacture critical defence equipments and also opening 49% FDI through automatic route.