Question

What is Liberalization?

Hint:

Remember: Liberalization + Privatization + Globalization = LPG reforms of 1991.

Answer 1

Step 1: Meaning.
Liberalization refers to the relaxation of government rules and controls in order to allow more freedom in economic activities.

Step 2: Key features.
\begin{itemize} \item Removal of licensing requirements in industries. \item Reduction of import tariffs and trade barriers. \item Encouragement of private enterprises and foreign investment. \end{itemize}

Step 3: Indian context.
India adopted liberalization in 1991 as part of economic reforms to overcome financial crisis, marking a major shift from a controlled economy to an open one.

Final Answer: \[ \boxed{\text{Liberalization = Reduction of government control in economic activities}} \]