Liberalization programme at a rapid pace. Further liberalization will stimulate Imports and create the necessary demand for dollars. Indeed it may be argued that slow Import expansion has been partially responsible fro the slow export expansion during the past decade.
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In the absence of this boldly approach the Government will face lobbying pressures for the liberalization of specify capital – account transactions from those keen to take their money out and given the need to unload the unneeded dollars, the Government is also likely to succumb to there pressures. In contrast Import liberalization offers the opportunity to kill two birds with one stone it premises to relive the upward pressure on the rupee and bring the usual efficiency grown.
The thrust of the policy is the freedom for the entrepreneur to enter any industry trade business. The approvals for any new venture including any charge are the existing venture is almost automatic. All that is needed is that are follows creation guidelines or fulfils certain conditions to get into a line of one’s choice. This has become possible as the controls which once governed the entry of entrepreneurs on almost all the activities have been done away with. The procedure Involving a case – by – case so examination of the proposals for new ventures has been given up license are no longer needed to short a business as has been the case so far. The capital markets too have been freed and opened to the private enterprise seeking capital. A new company can now be floated with new issue of shares / debentures etc. without seeking the permission of the Government. In case imported – equipment is needed for an industry, the entrepreneur need not approach the Government for foreign exchange or seek import license. The entrepreneur can buy foreign exchange in the market at the market rate. This has been made possible by making the rupee convertible in respect of transactions on current account covering allowed in the new economic policy enables the entrepreneurs to make their division themselves. These decisions in the absences of Government controls are to be in term of market – related prices and profits. This market converted environment will also faster oriented environment will also faster competition among those who will now complete to take advantage of the market opportunities.