Economics · Economy
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 associated with this system?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1A significant reduction in corruption and bureaucratic delays in obtaining necessary economic approvals.
- 2The creation of high barriers to entry for new businesses, potentially stifling innovation and leading to inefficiencies.✓
- 3The fostering of a highly competitive market environment with numerous domestic players in each industry.
- 4A rapid increase in the quality and global competitiveness of Indian-made goods due to stringent quality control.
Correct answer
The creation of high barriers to entry for new businesses, potentially stifling innovation and leading to inefficiencies.
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