What freedom did liberalization grant businesses with respect to the scale of business activities?

No restrictions on expansion or contraction of business activities

The economic reforms that were introduced were aimed at liberalising the Indian business and industry from all unnecessary controls and restrictions. They signalled the end of the licence-pemit-quota raj. Liberalisation of the Indian industry has taken place with respect to:
(i) abolishing licensing requirement in most of the industries except a short list
(ii) freedom in deciding the scale of business activities i.e., no restrictions on expansion or contraction of business activities
(iii) removal of restrictions on the movement of goods and services
(iv) freedom in fixing the prices of goods services
(v) reduction in tax rates and lifting of unnecessary controls over the economy
(vi) simplifying procedures for imports and experts
(vii) making it easier to attract foreign capital and technology to India.