Economic environment in India has undergone several changes since 1991 when the new Industrial policy was announced by the Central Government to give boost to the processes of liberalization and globalization. The term ‘liberalization’ means removal of entry and growth restrictions on the private sector enterprise. This has been done by the Government through:

(i)    abolishing licensing requirement in most of the industries except a short list:
(ii)    freedom in deciding the scale of business activates, i.e. no restrictions on expansion or contrition of business activities;
(iii)    freedom in fixing the prices of goods and services:
(iv)    removal of restrictions on the movement of goods and services:
(v)    reduction in tax rates and lifting of unnecessary controls over the economy;
(vi)    simplifying procedures for imports and exports : and
(vii)    marking it easier to attract foreign capital and technology to India.
Economic liberalization is a precondition for globalization of business for the speedy growth of the national economy.

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