- Image via Wikipedia
Ever since the liberalization movement came about in the 1990s, India has been well on the road to free market economy. Earlier, Indian economy was largely dictated by the rules and the norms of the government, the sole contender. But, in today liberalized economy, private parties have equal hand in policymaking as much as the government bureaus.
What is free market economy?
When the trading of goods, services, and information take place in a free market, the economy defined by it is called free market economy. In free market economy it is the law of supply and demand that rules the roost. Therefore, a business can determine what it wants to sell and in what quantity; and consumers can decide what they want to purchase and at what price. In short a free market economy means suppliers and buyers are masters of their own choices. A market economy will ensure competitiveness and efficiency in both distribution and production. The role of the government in a free market economy is very limited, to ensuring fair price. The intervention is certainly less than in a planned economy.
India as a free market economy
India free market economy policy has made it a favorite destination point for many investors. On the one hand there is the technically savvy, English speaking educated people, and on the other hand are the cheap labor; together they make India an invaluable place for investment. In addition to the human resources, India is abundant in its natural resources, furthering its economic cause.
Even amidst the financial turbulence that the world faces, India has shown resilience and survived it. Her size and growth have been steady and her democracy projects her as an attractive market. India democracy also ensures a working model that recognizes free enterprise, entrepreneurship, and risk taking.
Free market economy is a capitalist economy. It is the most efficient way to distribute a country resources. Backed by this free market economy, India will surely become an economic superpower very soon.