Meaning of Liberalisation: Liberalisation is the process or means of the elimination of control of the state over economic activities. It provides a greater autonomy to the business enterprises in decision-making and eliminates government interference.
Liberalisation in India: Since the adoption of the New Economic Strategy in 1991, there has been a drastic change in the Indian economy. With the arrival of liberalisation, the government has regulated the private sector organisations to conduct business transactions with fewer restrictions.
Objectives Liberalisation:
Impact of Liberalisation:
Positive Impact of Liberalisation in India
(i) Free flow of capital: Liberalisation has enhanced the flow of capital by making it affordable for the businesses to reach the capital from investors and take a profitable project.
(ii) Diversity for investors: The investors will be benefitted by investing a portion of their business into a diversifying asset class.
(iii) Impact on agriculture: In this area, the cropping designs have experienced a huge change, but the impact of liberalisation cannot be accurately measured. Government’s restrictions and interventions can be seen from the production to the distribution of the crops.
Negative Impact of Liberalisation in India:
(i) The weakening of the economy: An enormous restoration of the political power and economic power will lead to weakening the entire Indian economy.
(ii) Technological impact: Fast development in technology allows many small scale industries and other businesses in India to either adjust to changes or shut their businesses.
(iii) Mergers and acquisitions: Here, the small businesses merge with the big companies. Therefore, the employees of the small companies may need to enhance their skills and become technologically advanced.
