IGNOU MCO 4 2026 - Explain the concept of liberalisation, privatisation and globalisation

Question

Explain the concept of liberalisation, privatisation and globalisation of the economy. Also, discuss their implications for the Indian business.

12 Feb 2026

Answer :

Word Count : 459

Liberalisation, privatisation and globalisation represent a set of economic reforms aimed at transforming a controlled economy into a more market-oriented and competitive system. In the Indian context, these reforms were formally initiated in 1991 in response to a severe balance of payments crisis and have since reshaped the business environment. Liberalisation refers to the removal or reduction of government controls, restrictions and regulations on economic activities. Before 1991, the Indian economy was characterised by extensive licensing requirements, import restrictions, price controls and state intervention, commonly known as the “License Raj.” Liberalisation reduced industrial licensing, eased import controls, rationalised tax structures and encouraged foreign investment. The objective was to enhance efficiency, promote competition and allow market forces to determine prices

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