The Committee also recommended the introduction of a market-determined exchange rate regime while emphasing the need to contain the current account deficit within limits. The policy framework for the external sector based on the Rangarajan Committee Report was implemented along with policy changes in the trade, industrial and financial sectors.
Under trade policy, there has been a virtual elimination of licensing, a progressive shift of restricted items of imports to Open General Licence (OGL) and a lowering of tariff barriers. Industrial policy has been characterised by delicensing, removal of monopoly clauses defining large industrial houses and removal of most reservations for public sector enterprises.