Liberalization

Liberalisation
Liberalisation of the economy means its freedom from direct or physical controls imposed by the government.

Economic Reforms Under Liberalisation
(i) Industrial Sector Reforms

• Abolition of industrial licensing.
• De-reservation of production areas.
• Expansion of production capacity.
• Freedom to import goods.

(ii) Financial Sector Reforms
Liberalisation implied a substantial shift in the role of the RBI from a regulator to a facilitator of the financial sector.
(iii) Fiscal Reforms Fiscal reforms relate to revenue and expenditure of the government. Tax reforms are the principal component of fiscal reforms. Broadly taxes are classified

• Direct Taxes and
• Indirect Taxes

(iv) External Sector Reforms It include Foreign exchange reforms and Foreign trade policy reforms.