Define liberalisation in easy words.

Liberalization means relaxation of various government restrictions in the areas of social and economic policies. Liberalizing trade policy by the government that is removal of tariff, subsidies and other restrictions on the flow of goods and services between countries is also termed as liberalization. 

Liberalization is the result of New Industrial Policy which abolished the "License system". All industries except six major industries were liberalized. As a result industries grew rapidly and therefore liberalization also means deregulation and delicensing of industries. 

Autonomy at large has resulted because of liberalization. Liberalization means to follow liberal economic policy, accepted by the world. It has revolutionized the entire business world and has provided highly competitive opportunities for all countries. Liberalization has opened new business opportunities abroad and increased foreign direct investment.

Liberalized trade policy resulted in the free flow of goods from and within the country. A number of multinational company started operating world wide including India. New market for various goods came into existence and resulted not only in urban but also in rural development. It became very easy to obtain loans from banks for business expansion. "Foreign Collaboration" is the latest outcome of liberalization.

Measures of Liberalization adopted by Government of India: The government of India has adopted several measures of liberalization. Some of these measures are as under :

• License rule, except six industries abolished.
• Limit for foreign equity increased to 51%.
• Import duty on export related capital goods reduced to 15% and for project imports 25%.
• Corporate tax for domestic companies reduced from 45% to 0% and from 15% to 55% for foreign companies.
• Relaxation in foreign exchange regulation Act.
• Reforms is custom duties.
• Basic Telecommunication services opened to private sectors.
• Abolished minimum lending rate for the amount exceeding Rs.2, 00,000/-.
• Allow private investment in private sector.
• Establishment of private banks allowed.
• Five year tax holiday to new industrial unit set up in backward areas.
• Automatic approval for 100% export oriented units and the units in export processing zones. 
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