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 benefited 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.
