Question

Explain the various liberalisation measures undertaken by the government of India since 1991.

Answer 1

1. Lifting trade barriers involves removing quantitative import restrictions, cutting customs and export duties, and easing restrictions on foreign investment to integrate with world markets and promote competition.

2. Abolition/reduction of industrial licensing (the end of the “Licence‑Raj”) would make the establishment of new units easier, with fewer regulatory approvals.

3. Special Economic Zones (SEZs) have world‑class infrastructure and tax relaxations to attract exporters and foreign firms.

4. Relaxation of foreign‑exchange controls led to freer transactions in foreign currencies on the current account (shift from the restrictive FERA era).

5. Greater role for the private sector/privatisation & disinvestment, allowing private firms in areas previously reserved for the public sector.

6. Flexibility in labour laws permitting temporary/contract employment and more flexible labour arrangements for investors.

7. Relaxation of tax, environmental, and other regulatory controls to encourage foreign investment and global integration.

8. Pro‑investment campaigns (e.g., “Make in India”) and investor incentives actively promote FDI and manufacturing.