what is the difference b/w liberalization and globalisation

Liberalisation refers to the freedom of the economy from direct or physical controls (such as, industrial licensing, price control, import license) imposed by the government. It implies greater dependence on the market for making various economic decisions. In other words, it refers to a gradual move from a planned socialist economy towards a market economy.

The following liberalisation measures were adopted in the New Economic Policy of 1991.

1. Industrial Sector Reforms: Under the industrial sector, major reforms were taken such as abolition of the licensing system, de-reservation, augmentation of the production capacity, freedom in importing capital goods and reforms in small scale industries.

2. Financial Sector Reforms: Under the financial sector, major reforms were in the form of shift in the role of RBI, increasing the role of private sector and encouraging the FIIs (Foreign Industrial Investors) to invest in India,

On the other hand, globalisation can be defined as a process associated with increasing openness, growing economic independence and promoting economic integration in the world economy.

Some of the important strategies followed by India in the direction of globalisation are as follows.

1. Removal of Barriers : Various barriers on trade such as tariffs, custom duties, quotas, etc. were reduced considerably.

2. Facilitation of International Trade : With the formation of WTO, various restrictions that were been imposed on the trade were removed. Except for some specific goods, open competition was encouraged in the trade market.

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