INTRODUCTION Liberalization of the economy means to free it from direct or physical controls imposed by the government. Economic reforms were based on the assumption that market forces could guide the economy in a more effective manner than government control. Examples of one of other undeveloped countries like Korea, Thailand, Singapore, etc. that had achieved rapid economic development as a result of liberalization were kept in consideration .
Industrial Sector was among the first sectors to be liberalized in India in a series of measures. Industrial licensing has been abolished except in a small number of sectors where it has been retained on strategic considerations.
Foreign investment is more than 24% in the equity capital of units manufacturing items reserved for the small scale industries.
Foreign Investment Promotion Board (FIPB) is a competent body to consider and recommend foreign direct investment.
Trade policy allowing domestic providers (of goods and/or services) to compete more freely in world markets and foreign providers to compete more freely in domestic markets.
TRADE SECTOR REFORMS ELIMINATION OF IMPORT LICENSING RATIONALISATION OF TARIFF STRUCTURE ADOPTION OF FLEXIBLE EXCHANGE RATE
Financial liberalization (FL) refers to the deregulation of domestic financial markets and the liberalization of the capital account. In one view, it strengthens financial development and contributes to higher long-run growth. In another view, it induces excessive risk-taking, increases macroeconomic volatility and leads to more frequent crises. 3. Financial Liberalization
Financial Liberalization reforms REFORMS IN BANKING SECTOR REFORMS IN CAPITAL MARKET REFORMS IN INSURANCE
India's fiscal sector reforms help to raise the rate of savings and investment in India. This further helps to enhance the productivity of public expenditures
India has established itself as one of the fastest growing economies in the world. India is also advancing towards the economical growth and improvement in literacy.
During 1999-2000, India's domestic savings and investment was estimated to grow by 23% and Indian economy was expected to grow by 6.4% although the average growth rate declined to 6.0% in comparison to earlier year.