The correct answer is option (3)- Liberalization.
Reduction in tax rates and lifting of necessary controls over the economy is a feature of Liberalization.
Liberalisation : 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, and
(vii) making it easier to attract foreign capital and technology to India.
OTHER OPTIONS
- Privatisation: The new set of economic reforms aimed at giving greater role to the private sector in the nation building process and a reduced role to the public sector. This was a reversal of the development strategy pursued so far by Indian planners. To achieve this, the government redefined the role of the public sector in the New Industrial Policy of 1991, adopted the policy of planned disinvestment of the public sector and decided to refer the loss making and sick enterprises to the Board of Industrial and Financial Reconstruction.
- Globalisation: Globalisation means the integration of the various economies of the world leading towards the emergence of a cohesive global economy. Till 1991, the Government of India had followed a policy of strictly regulating imports in value and volume terms. These regulations were with respect to
(a) licensing of imports,
(b) tariff restrictions and
(c) quantitative restrictions
- Disinvestment refers to the sale or transfer of government-owned or public-sector assets, including shares in state-owned enterprises, to private individuals or entities. This process is a component of privatization, where the government reduces its ownership or control over certain industries or businesses.
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