Liberalization, an opportunity or Threat

“Liberalization implies a reduction in government intervention and free play of market forces at the national and international level.”^[1]Liberalization is an opportunity. We can bring about a lot of changes. Economic liberalization can do well to a country. Countries have to do well beyond economic liberalization and have to adapt and extend the language of economics in order to think more sufficiently about human development. Without sufficient social development like literacy, health, social security and women’s welfare there can be no importance in economic expansion if growth has to serve the society.

India became liberal in the year 1991.The reason India had become liberal was because the Balance of payment wherein India had to give 20 tons to the Union bank of Switzerland and 47 tons to Bank of England as part of a bailout deal with the International Monetary Fund. We also had changed the structure of the economic reforms of India. The foreign investment system governing foreign direct investment, portfolio investment and venture capital were liberalized to invite the foreign capital.

The industrial License was needed to start business .which was abolished as there were many loose ends. As it was abolished the government had the upper hand on   how much a particular company produced. Many domestic producers wanted to get the license so that they could increase the production and the efficiency. Which was only possible only if there cooperation from the government officials and the politicians.

India had eliminated all quantitative restriction (QRs) two years before the World Trade Organization which was planned on March31, 2001.It is a significant event in India’s trade policy. Quantitative restrictions restrict the country from trading with certain country to a certain quantity, no matter how much they ask for .The removal of the QR helped India boost the retail trade in India.

I would like to conclude saying that liberalization is an opportunity where we can make profit and .India has gained a lot from liberalization. Liberalization is important so that there is some restriction in all the activities and can also have some control over trading with only those countries wants.

References

[1] http://www.preservearticles.com/2012032228684/what-are-the-achievements-of-liberalization-in-india.html

Vignesh Nathan

FSLE-3