Liberalisation of the economy means to free the trade from direct or physical controls imposed by the government.
The four effects of liberalisation on the Indian economy are :
(i) Competition would improve the performance of producers within the country.
(ii) Barriers on foreign trade and foreign investment were removed to a large extent. This meant that goods could be imported and exported easily.
(iii) Foreign companies could set up factories and offices to boost up production.
(iv) It allows to make decisions freely.
(v) The competition would improve the performance of producers within the country since they have to improve their quality.