Correct Option (A)
Economic liberalisation in India commenced significantly with substantial changes in industrial licensing policy. The New Industrial Policy of 1991 abolished industrial licensing for most industries, except for a select few strategic sectors. This measure aimed to reduce government control, promote competition, and encourage private sector participation, thereby fostering economic growth.
Incorrect Options:
The convertibility of the Indian rupee was a gradual process that occurred after the initial phase of liberalisation, primarily in the current account. Full capital account convertibility remains a subject of ongoing debate and policy. Doing away with procedural formalities for foreign direct investment (FDI) was a consequence and an integral part of the broader liberalisation process, but not its singular starting point. While tax reforms, including reduction in tax rates, were an important component of economic liberalisation, they were implemented progressively and were not the initial trigger for the entire liberalisation process.