7.1.1. Meaning of Liberalisation

Economic liberalisation is the policy of deregulation of different segments of economy. It is the policy of doing away or reducing the government’s controls over industry and other activites, which existed before 1991. The objective of introducing the liberalisation policy in 1991 was to move from a regulated system to a new system where regulations were to be reduced and ultimately minimised. Different sectors of the economy were to be made free from controls, licenses and permits. The Indian policy-makers were not thinking of a policy of laissez-faire, i.e. completely unregulated economy, but of reduced regulation.