Importance of liberalization is as follows:

a. Liberalisation believes in ‘free market economy’. Therefore, it implies the gradual reduction of government control. This means the abolition of a licence-raj. It results in the removal of red-tape, procedural delay and bureaucratic regulation of economic activities.

b. Liberalisation lays the foundations for multiplication of business, trade, and commerce. In a free market economy, diversification of business, trade, and organisation takes place.

c. As there is expansion of business and as more and more capital is injected into the economy, the use of technology and automation becomes necessary. This helps in mechanization of work and computerization of administrative processes. Efficiency and economy are ensured.

d. Under the process of liberalization, the consumer is benefitted in many ways. There is a wider choice of goods and services. There is a great improvement in quality of goods and after-sales services.

e. Liberalisation introduces a competitive market system. In every matter there is free competition. To the extent such competition is regulated by government, the competition is healthy. This ensures not only better standards of goods and services, but also reasonable prices.

f. Finally, liberalization in the long-run brings about economic growth and progress of the nation. Of course, there must be adequate, planned and goal oriented governmental regulation.

Liberalisation is the process or means of the elimination of control of the state over economic activities. It provides a greater autonomy to the business enterprises in decision-making and eliminates government interference.

• To boost competition between domestic businesses
• To promote foreign trade and regulate imports and exports
• To improve the technology and foreign capital
• To develop a global market of a country
• To reduce the debt burden of a country
• To unlock the economic potential of the country by encouraging the private sector and multinational corporations to invest and expand
• To encourage the private sector to take an active part in the development process
• To reduce the role of the public sector in future industrial development
• To introduce more competition into the economy with the aim of increasing efficiency