CA Foundation · Business Economics · Indian Economy
Which of the following measures was part of the 'liberalisation' component of the 1991 economic reforms in India?
Abolition of industrial licensing for most industries is a liberalisation measure. Liberalisation removes controls and restrictions on private enterprise, and the 1991 industrial policy dismantled the licence-permit system except for a short list of industries. Selling government shares is privatisation, not liberalisation.
- AAbolition of industrial licensing for most industries except a short listCorrect
- BSale of government shares in public sector enterprises
- CEntry of foreign investors into Indian capital markets only through joint ventures
- DNationalisation of major private banks
Explanation
Liberalisation meant removing controls on domestic enterprise, such as the licence-permit raj. The New Industrial Policy of 1991 abolished industrial licensing for most industries. Sale of government shares is disinvestment, which falls under privatisation. Nationalising banks is the opposite of reform direction.
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