How LICENSE RAJ destroyed our ECONOMY before 1991 | Before 1991 Economic Liberalisation | Finlight

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About The Video:
The License Raj refers to a system of extensive government regulations and licenses that were in place in India from the 1950s to the 1990s. ©️©️
While the intentions behind the License Raj were to promote self-sufficiency and protect domestic industries, it had several negative impacts on India’s growth and development.
1. Barrier to Entrepreneurship: Obtaining licenses and approvals from multiple government departments was a cumbersome and time-consuming process. This discouraged innovation and discouraged many potential entrepreneurs from starting new ventures.
It also limited competition in various sectors, leading to inefficiencies and low productivity.
2. Slow Economic Growth: The extensive regulations and licensing requirements of the License Raj hindered economic growth. The system favored large, established companies that had the resources to navigate the bureaucratic hurdles, while small and medium-sized enterprises faced significant challenges.
This led to a concentration of economic power and slowed down overall economic development.
3. Inefficient Resource Allocation: The License Raj led to inefficient allocation of resources.
Industries were often protected from foreign competition, which reduced incentives for domestic firms to improve their efficiency and quality. The system also created a black market for licenses, with widespread corruption and rent-seeking behavior.
4. Lack of Innovation and Technology Transfer: The restrictive nature of the License Raj limited access to foreign technology and inhibited the transfer of technological know-how.
This lack of innovation and modernization hindered the overall competitiveness of Indian industries.
5. Poor Quality and Limited Choices: The License Raj resulted in limited choices for consumers as only a few companies were allowed to operate in each sector.
This lack of competition often led to poor quality products and services.
The absence of market forces and consumer choice meant that companies had little incentive to improve quality or invest in customer satisfaction.
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Video Timings-
Introduction- 00:00
What was License Raj?- 01:18
What were the things involved in this License Raj - 02:39
Drawbacks of License Raj: 06:42
Ending Credits: 09:06
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