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Liberalisation of the Economy:
Removal of Industrial Licensing: All industrial licensing was abolished but for a shortlist of 18 industries related to security and strategic concerns, social reasons, hazardous chemicals and over-riding environmental reasons and items of elitist consumption industries reserved for the small scale sector which were to continue under the reservation list. Subsequently, all industries except for a small group of five industries, industrial licensing requirements have been done away with.
Dereservation of SSI Items: Although initially the Government decided to continue reservation of items under the SSI sector, but later, it gradually withdrew reservation in several SSI items every year. For instance, in 2003-04 budget, the Union Finance Minister announced dereservation of 75 items of laboratory chemicals, leather and leather products, plastic products, chemicals and chemical products and paper products. During 2005-06 budget, the Finance Minister announced dereservation of 108 items from the SSI list, out which 30 items belonged to the category of "textile products, including hosiery". Earlier the Government had announced dereservation of ready-made garments. In other words, even the small-scale industry (SSI) has been forced to face both domestic and international competition.
TC = 1q^3 - 40q^2 + 840q + 1800 Price= $750
argument against in favour of traditonel theory profit maximisation
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