explain deregulation of industrial sector as an economic reform. its urgent.. plz answer this ques. ..... .

Dear Student

Deregulation refers to the removal of unnecessary controls and restrictions of the government in the form of licenses, permits, and quotas. India initiated liberalization of industries in 1991. The liberalization of industries in India took the following form.

(i) Abolition of licenses: License required for the establishment of industries were abolished. The system of licensing was retained only for six industries namely, liquor, cigarette, defense equipment, dangerous chemicals, industrial explosives, and drugs and pharmaceuticals

(ii) Augmentation of Production: Enterprises became free in deciding the scale and size of production and the price of the products. The MRTP companies (companies having assets worth more than Rs 100 crore) were free to expand the scale of their business according to the market conditions

(iii) Removal of Trade Restrictions: Various restrictions regarding trade such as quantitative restrictions, customs, duties, tariff, etc. were removed to ease the movement of goods and services

(iv) Encouragement to Foreign Direct Investment (FDI) : Emphasis was laid to encourage competition in the market and to attract Foreign Direct Investment (FDI) from other countries.  


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