Economics · Economic History of India
The regulatory framework adopted by India between 1947 and 1990, often referred to as the 'License Raj,' aimed to direct economic activity. What was a significant unintended negative consequence often associated with this system?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The creation of barriers to entry for new businesses, potentially stifling innovation and leading to inefficiencies.✓
- 2A significant reduction in corruption and bureaucratic delays in obtaining necessary approvals for economic activities.
- 3A rapid increase in the quality and global competitiveness of Indian-made goods due to stringent quality control measures.
- 4The fostering of a highly competitive market environment with numerous players in each industry.
Correct answer
The creation of barriers to entry for new businesses, potentially stifling innovation and leading to inefficiencies.
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