Reduction in tax rates and lifting of unnecessary controls over the economy is a feature of this policy :
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Liberalization
Option (1) Globalisation — Incorrect. Globalisation means linking the Indian economy with the world economy, for example through more trade and foreign investment.
Option (2) Disinvestment — Incorrect. Disinvestment means the government selling its shares in public sector enterprises to the private sector. It is a step under privatisation.
Option (3) Liberalization — Correct. Liberalisation aims at freeing Indian business and industry from all unnecessary controls and restrictions. One of its points is “reduction in tax rates and lifting of unnecessary controls over the economy”, which is the feature given in the question.
Option (4) Privatization — Incorrect. Privatisation means giving a greater role to the private sector and a smaller role to the public sector.
NCERT (2026-27 Edition): “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:” “(v) reduction in tax rates and lifting of unnecessary controls over the economy,” |