Definitions [1]
Definition: Liberalisation
Liberalisation means removing unnecessary government restrictions and controls on business activities so that trade and industries can grow freely and compete globally.
Key Points
Key Points: Liberalisation
- Liberalisation helps markets run freely with less government control.
- Boosts investment, competition, and technology use.
- Protects investor interests and makes trade easier.
- Liberalisation (from 1991) reduced government controls and licensing and opened more sectors to private competition.
- Industrial licensing removed for most industries; only a few areas reserved for public sector and small‑scale reservations reduced.
- Financial sector: private and foreign banks allowed; FIIs (foreign investors) permitted in markets; RBI became more of a facilitator.
- Tax reforms: income and corporate tax rates cut, procedures simplified; GST introduced to create one national market and reduce evasion.
- Foreign exchange: rupee devalued in 1991; exchange rate mostly determined by market demand and supply.
- Trade & investment: import licensing and quantitative restrictions removed, tariffs reduced, export duties scrapped to make Indian industry more competitive globally.
