Read the following statements carefully and choose the correct option regarding Assertion (A) and Reason (R).
Assertion (A): One objective of liberalisation was to remove barriers to entry and growth of firms.
Reason (R): The license raj restricted entrepreneurial freedom and market competition.
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. Both A and R are true and R is the correct explanation of A.
Liberalisation aimed to modernize the economy by dismantling the "License Raj," a system where government permits were mandatory to start or expand businesses. Since these regulations stifled innovation and limited the number of players in the market, removing them was essential to foster entrepreneurial freedom. Therefore, (R) directly explains why the objective mentioned in (A) was necessary to enhance market competition and industrial growth.