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Question
What is liberalisation? Describe any four effects of liberalisation on the Indian economy.
What is liberalisation? Describe any four effects of liberalisation on the Indian economy.
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Solution
Liberalisation is a method in which a state raises limitations on some private individual ventures. Liberalisation befalls when something which was forbidden is no longer forbidden or when government laws are loosened.
Why liberalisation?
- Liberalisation was started to put an end to these limitations and also to open multiple areas of the economy.
- Even though some liberalisation proposals were prefaced and were tried to implement in the 1980s in the major areas like export-import policy, technology up-gradation, fiscal policy and foreign investment, industrial licensing, economic reform policies that were launched in 1991 were more general.
- There are a few significant areas, mainly the financial sector, industrial sector, foreign exchange markets, tax reforms and investment and trade sectors which gained recognition in and after 1991.
Objectives
- To boost and enrich the competition between domestic businesses
- To promote and develop foreign trade and regulate imports and exports
- To see the improvement of technology and foreign capital
- To develop a global market and expand the goods of a country
- To decrease the debt burden of a country
- To unseal the economic potential of the country by enhancing the private sector and multinational corporations to invest and expand
- To encourage the private sector to play an active role in the development process
- To come down the role of the public sector in future industrial development
- To initiate and start more competition into the economy with the aim of increasing efficiency
Effects of liberalisation
- It has lead to the free flow of capital
- Diversity for Investors as the Investors will be directly benefitted by investing a portion of their business into a diversifying asset class
- Foreign trade has increased
- Employn=ment opportunities are coming out
- Small scale industries have been in major trend
- Agricultural goods and products are in great demand
- Raw materials for the industries are being in a great need for the producers
Liberalisation is a method in which a state raises limitations on some private individual ventures. Liberalisation befalls when something which was forbidden is no longer forbidden or when government laws are loosened.
Why liberalisation?
- Liberalisation was started to put an end to these limitations and also to open multiple areas of the economy.
- Even though some liberalisation proposals were prefaced and were tried to implement in the 1980s in the major areas like export-import policy, technology up-gradation, fiscal policy and foreign investment, industrial licensing, economic reform policies that were launched in 1991 were more general.
- There are a few significant areas, mainly the financial sector, industrial sector, foreign exchange markets, tax reforms and investment and trade sectors which gained recognition in and after 1991.
Objectives
- To boost and enrich the competition between domestic businesses
- To promote and develop foreign trade and regulate imports and exports
- To see the improvement of technology and foreign capital
- To develop a global market and expand the goods of a country
- To decrease the debt burden of a country
- To unseal the economic potential of the country by enhancing the private sector and multinational corporations to invest and expand
- To encourage the private sector to play an active role in the development process
- To come down the role of the public sector in future industrial development
- To initiate and start more competition into the economy with the aim of increasing efficiency
Effects of liberalisation
- It has lead to the free flow of capital
- Diversity for Investors as the Investors will be directly benefitted by investing a portion of their business into a diversifying asset class
- Foreign trade has increased
- Employn=ment opportunities are coming out
- Small scale industries have been in major trend
- Agricultural goods and products are in great demand
- Raw materials for the industries are being in a great need for the producers
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