What is liberalisation ? Describe any four effects if liberalisation on the indian economy?
Answers
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.
Answer:
1) Economic liberalization has opened up the Indian economy to the foreign investors. 2) It has also opened up the economy to the foreign companies who now have greater access to the Indian markets. 3) It has increased foreign trade. 4) It has increased the job opportunities for the people