Liberalisation Meaning- Liberalised Remittance Scheme

Liberalisation

The basic and literal meaning of liberalisation is to make freer or liberal. Liberalisation meaning covers a wide area of topics under the economy and socio-political policies.

Liberalisation Meaning

Liberalisation is a part of the ‘Liberal’ family. Liberal in its literal meaning is ‘Openness’. Whether it be openness of views or inclusion of more rights, Liberalisation is a process of free and easy ‘conditions’.

According to the Cambridge Dictionary, Liberal means, “Respecting and allowing many different types of beliefs or behaviour.” Liberalisation meaning has been extended from the same and is a process of making things liberal. Liberalisation meaning, according to the Cambridge Dictionary is, “The practice of making laws, systems, or opinions less severe.”

Unprejudiced, Permissive, Unbigoted, Open-minded, Enlightened, Free and easy, Laissez-faire, Libertarian, Latitudinarian, Non-partisan, indulgent, Lenient, are some of the synonyms of Liberalisation meaning.

Narrow-minded, Conservative, Bigoted, Strict, Scant, Careful, and Miserly are some of the opposite words(antonyms) for Liberalisation meaning.

Liberalisation Meaning in Hindi

उदारीकरण का मूल और शाब्दिक अर्थ स्वतंत्र या उदार बनाना है। उदारीकरण का अर्थ अर्थव्यवस्था और सामाजिक-राजनीतिक नीतियों के तहत विषयों के एक विस्तृत क्षेत्र को शामिल करता है।

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What is Liberalisation

To get to know the Liberalisation meaning through the purview of trade and commerce, we should dive into the history and understand what happened during The Great Depression of 1929.

Often described as the ‘longest, deepest, and most widespread depression of the 20th century’, The Great Depression was an economic depression that occurred worldwide around the 1930s. After the world faced this economic disaster, there was the ultimate realisation of freer and liberal trade, worldwide.

After the establishment of the General Agreement on Tariff and Trade(GATT) in 1948, it lead to liberalise trade and bring economic prosperity all around. The primary motive of GATT was to bring economic revolution with free and fair trade.

Liberalisation meaning in trade and commerce is often associated with the reduction of taxes, labour market flexibility, social security, privatisation, and less severe trade laws.

Liberalisation Definition

Abolition of Licence Raj System

The Licence Raj or Permit Raj was a system of complicated regulations, restrictions and licenses. Later the government of India initiated a liberalisation policy in year 1991 and that’s when the Licence Raj became outdated.

Loosening of government controls over private sector

Loosening of goverment controls over private sector also curbed the monopoly of the public sector from various areas of our economy. Private sector, when starts working with fewer restrictions in the country, it depicts liberalisation in the country.

Liberalisation Meaning in Social and Political purview

Liberalisation meaning in social and political purview refers to the relaxation of laws. These relaxations are made for more ease of living and to allow people to choose. For example, abortion, divorce and the use of psychoactive drugs were preventive in the past. However, the relaxation of laws over these ‘restricted activities’ provided individuals with some choices to choose from.

Moreover, relaxation in the laws might add up more of the civil rights to the individuals. Relaxations of laws related to homosexuality, inter-faith marriages, inter-racial marriages, same-sex marriages have given individuals the right to live with ‘their chosen partners’.

Liberalisation Examples (Social and Political purview)

Decriminalisation of homosexuality

In the year 2018, section 377 of the Indian Penal Code was scraped down and considered unconstitutional by the apex court of India, The Supreme Court. After years of protest and grassroots activism, the following section was ruled unconstitutional, and thus, it effectively decriminalised homosexual activities. According to the petitioners, Section 377 of the Indian Constitution was a challenge to their right to sexual privacy, dignity. The petitioners felt that it was their freedom of expression to argue against the constitutionality of Section 377.

Thus, decriminalisation of homosexuality is a kind of liberalisation.

Decriminalisation of Adultery

Sexual relations of a married person to someone who is not their husband or wife is considered adultery.

In the year 2018, a five-judge bench decriminalised adultery by scraping down Section 497 of the Indian Penal Code (IPC). The ground on which the unanimous decision ruled out Section 497 was that the bench considered it as ‘paternalistic law, which infringes upon a woman’s autonomy and dignity’.

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Liberalised Remittance Scheme

The Liberalized Remittance Scheme (LRS) is a policy introduced by the Reserve Bank of India (RBI), the country’s central bank, to facilitate Indian residents to freely remit funds abroad for various purposes. The LRS allows Indian individuals to send money overseas for investments, travel, education, and other permissible current and capital account transactions.

Here are some key features of the Liberalized Remittance Scheme:

Purpose: The LRS allows individuals to remit money abroad for various purposes, including travel, education, medical treatment, investments, buying property, and gifting, among others.

Financial Limit: The scheme sets a limit on the amount of money that can be remitted by an individual in a financial year. The RBI periodically revises this limit based on the prevailing economic conditions. the limit was $250,000 per financial year. However, this limit may have been revised since then, so it’s important to check the current limit.

Designated Banks: Transactions under the LRS can be carried out through authorized banks in India. Individuals must have accounts with these banks to make remittances under the scheme.

Documentation: While there is no need to obtain prior approval from the RBI for remittances under the LRS, individuals are required to submit certain documentation and a declaration form to the authorized bank for the transactions.

Taxation: Income tax and other tax implications may apply to the remittances made under the LRS. It’s advisable to consult with a tax advisor or financial expert to understand the tax implications and comply with Indian tax laws.

Permissible Transactions: The LRS covers a wide range of permissible transactions, including overseas investments in stocks, real estate, and other assets, as well as educational expenses, travel expenses, gifts, and donations.

Prohibited Transactions: Certain types of transactions are not permitted under the LRS, such as remittances for gambling or lottery winnings, speculative forex trading, and investments in prohibited sectors.

Reporting Requirements: Individuals are required to report their LRS transactions to the RBI through the designated banks. These reports help the RBI monitor capital flows and ensure compliance with the scheme’s regulations.

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