Which of the following is NOT one of the areas in which the Indian industry was liberalised after 1991?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Planned disinvestment in public sector enterprises
Option (1) Reduction in tax rates and lifting of unnecessary controls — An area of liberalisation. The reforms freed business from unnecessary controls, and lower tax rates were part of this.
Option (2) Making it easier to attract foreign capital and technology — An area of liberalisation. Easier entry of foreign capital and technology removed old restrictions on business.
Option (3) Freedom in deciding the scale of business activities — An area of liberalisation. This means no restrictions on expansion or contraction of business activities.
Option (4) Planned disinvestment in public sector enterprises — Not an area of liberalisation. Planned disinvestment is a step of privatisation. Disinvestment transfers public sector enterprises to the private sector and dilutes the government’s stake in them.
Liberalisation removes controls on business; privatisation reduces the role of 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:
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