Q.Define liberalisation. State any four measures of liberalisation introduced in India after 1991.

Liberalisation means reducing government control over the economy so that market forces of demand and supply play a bigger role in economic decisions.

Liberalisation is the process of freeing economic activity from excessive government regulation and control, allowing market forces — the free interaction of demand and supply — to determine what is produced, in what quantities, and at what prices. It formed the first pillar of India's 1991 New Economic Policy.

Four measures of liberalisation introduced after 1991:

1. Abolition of industrial licensing — the requirement to obtain government permission before setting up or expanding a factory was removed for almost all industries, leaving only a short list requiring licences (e.g., defence, atomic energy, a few hazardous items).
2. Trade-policy liberalisation — import licensing was abolished for most goods, and customs-duty (tariff) rates were reduced in stages, making imported inputs and technology cheaper and exposing domestic industry to competition.
3. Financial-sector reforms — interest rates were gradually deregulated instead of being fixed by the government, and private and foreign banks were permitted to expand their operations.
4. Liberalised foreign investment policy — limits on Foreign Direct Investment (FDI) were raised across a widening list of sectors, with many sectors moved to an automatic-approval route instead of case-by-case government clearance.

Confusing liberalisation (removing controls) with privatisation (transferring ownership) — keep the two pillars conceptually separate even though both loosen state control.