​Which of the following best defines liberalization?

Correct option is D

​The correct answer is (d) The process of reducing or removing government regulations and restrictions on economic activities.

Explanation:

• Liberalization refers to the process of reducing or eliminating government regulations and restrictions on economic activities, thereby encouraging private sector participation, competition, and market-driven growth.
• It involves reforms that open up markets, relax trade barriers, reduce tariffs, and privatize state-owned enterprises, among other measures, to foster a more open and dynamic economy.

Information Booster:

• Economic Liberalization in India (1991):
  In 1991, India embarked on a major economic reform process known as liberalization. This was triggered by an economic crisis and included measures such as:
• Reduction in import tariffs and quotas
• Privatization of state-owned enterprises
• Deregulation of industries and sectors
• Encouraging foreign investment through the Foreign Direct Investment (FDI) policy
• The goal of liberalization is to make the economy more competitive, efficient, and integrated with the global economy.

Additional Knowledge:

• Strict Government Control – This is the opposite of liberalization. Government control of economic activities is usually associated with socialism or command economies, where the state has significant control over production, prices, and the distribution of goods.
• Increased Regulations – This aligns with protectionism or government interventionism, where regulations are tightened to protect domestic industries.
• Maintaining Existing Regulations– This refers to the status quo approach, where the existing government regulations are kept in place without any significant changes, which is not liberalization.