Question
Discuss India's economic policy of liberalization.
Solution
- The term liberalisation refers to a range of policy decisions that the Indian state took since 1991 to open up the Indian economy to the world market.
- The state after independence had put in place a large number of laws that ensured that the Indian market and Indian indigenous business were protected from competition of the wider world.
- Liberalisation of the economy meant the steady removal of the rules that regulated Indian trade and finance regulations. These measures are also described as economic reforms.
- The process of liberalisation also involved the taking of loans from international institutions such as the International Monetary Fund (IMF). These loans are given on certain conditions.
- The Indian economy has witnessed a series of reforms in all major sectors of the economy like: agriculture, industry, trade, foreign investment and technology,
public sector, financial institutions etc. - There has been reduction in tariffs and import duties so that foreign goods can be imported easily and allowing easier access for foreign companies to set up industries in India.
