Effects of Liberalisation on the Economy:

Liberalisation refers to the relaxation of government regulations and restrictions on the economy. It involves reducing trade barriers, opening up markets to foreign competition, and allowing for greater private sector participation. Liberalisation has several effects on the economy, including:

1. Economic Growth:
- Liberalisation promotes economic growth by stimulating competition, innovation, and efficiency.
- By reducing trade barriers, countries can access a wider range of goods and services, which leads to increased consumer choice and higher living standards.
- It encourages investment, both domestic and foreign, by providing a more conducive environment for businesses to operate.

2. Increased Foreign Direct Investment (FDI):
- Liberalisation attracts foreign direct investment as it allows foreign companies to enter the market and establish their presence.
- FDI brings in capital, technology, and expertise, which can boost productivity and create employment opportunities.
- It also helps in the transfer of knowledge and skills, leading to the overall development of the domestic economy.

3. Global Integration:
- Liberalisation promotes global integration by encouraging international trade and reducing barriers to cross-border transactions.
- It enables countries to specialize in producing goods and services in which they have a comparative advantage, leading to increased efficiency and productivity.
- Global integration also facilitates the transfer of technology, knowledge, and best practices from one country to another.

Changes in Industrial Policy and their Effects on Industrial Growth:

Industrial policy refers to the government's intervention in the economy to promote the growth and development of specific industries. Changes in industrial policy can have significant effects on industrial growth. Some key points to consider are:

1. Targeted Support:
- Governments can provide targeted support to specific industries through policies such as tax incentives, subsidies, and grants.
- This support can help industries overcome initial barriers and promote their growth.
- For example, governments may provide financial assistance to promote research and development activities or invest in infrastructure development to support industrial clusters.

2. Diversification of Industries:
- Industrial policy can encourage the diversification of industries, reducing dependence on a single sector or product.
- Diversification helps in reducing risks and enhancing the resilience of the economy.
- Governments can promote the development of new industries by providing incentives for innovation, entrepreneurship, and skill development.

3. Regulation and Governance:
- Industrial policy can also focus on improving the regulatory environment and governance mechanisms.
- Streamlining bureaucratic processes, reducing corruption, and ensuring transparent and fair competition can enhance industrial growth.
- Effective regulation can protect consumers, promote fair trade, and create a level playing field for businesses.

In conclusion, liberalisation has several positive effects on the economy, including economic growth, increased foreign direct investment, and global integration. Changes in industrial policy can further promote industrial growth by providing targeted support, diversifying industries, and improving regulation and governance. These measures collectively contribute to the overall development and prosperity of the economy.