What was the impact of liberalization on small-scale industries in India?a)Increased competition and growth opportunities.b)Decreased government support and protection.c)Shift towards export-led growth strategies.d)Expansion of domestic markets and consumer demand.Correct answer is option 'B'. Can you explain this answer?

Question

Answer

Impact of liberalization on small-scale industries in India:

Decreased government support and protection:
Liberalization in India led to a reduction in government support and protection for small-scale industries. Prior to liberalization, these industries received various forms of assistance such as subsidies, protection from foreign competition, and preferential treatment in procurement. However, with the opening up of the economy, these protective measures were gradually phased out. This made it challenging for small-scale industries to compete in a more open and competitive market environment.

Increased competition and growth opportunities:
Liberalization also resulted in increased competition for small-scale industries. With the entry of foreign companies and the removal of trade barriers, small-scale industries had to face competition from larger, more established players. While this posed challenges for many small-scale industries, it also opened up growth opportunities for those that were able to adapt and innovate in order to compete effectively in the new market scenario.

Shift towards export-led growth strategies:
As a result of liberalization, small-scale industries in India were encouraged to explore export-led growth strategies. With greater access to international markets, many small-scale industries started focusing on exporting their products to foreign countries in order to expand their customer base and increase their revenues. This shift towards exports helped many small-scale industries to grow and become more competitive in the global market.
In conclusion, liberalization had a significant impact on small-scale industries in India by decreasing government support and protection, increasing competition and growth opportunities, and encouraging a shift towards export-led growth strategies. While these changes presented challenges for small-scale industries, they also opened up new avenues for growth and development in the increasingly globalized economy.

Answer

The impact of liberalization on small-scale industries in India includes decreased government support and protection. Liberalization aimed to open up the Indian economy to global competition, which meant that small-scale industries faced increased competition from domestic and international players. The government reduced protectionist measures, such as import tariffs and restrictions, which made it challenging for small-scale industries to compete. However, liberalization also provided new growth opportunities and access to larger domestic and international markets, encouraging small-scale industries to innovate and adapt to the changing economic environment.

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