India is gradually moving towards open or Market economy. This has been the need of the hour. The modern trend is towards market economy. From the erstwhile socialist countries to the developed U.S.A and the West the open economy has occupied the center stage. Entrepreneurs want minimum or no government control over their business. They want ample freedom in their enterprises.The industrialists bring in their own finance, they may sell shares to private individuals and organizations or they may even borrow from open market. Once finance is arranged steps are taken to invest the fund in productive purpose so that surplus money can be generated in the form of profit. By productive purpose it may mean manufacturing of products and selling in the market, either directly or through some intermediaries know as middlemen. India is precisely following this policy of open economy as the instrument to achieve economic development and march from a developing to a developed country with minimum government restrictions Free trade and free market are the most important features in open economy. Here there is healthy competition among the manufacturers or businessmen and the goods and services are sold to the buyer offering the most competitive price. In short there is a direct link between effort and reward. The business man is free, he has the freedom to invest in any lawful business or service and sell them at the most competitive price. The difference between the price and the cost is his margin of profit. He will pay tax at the prescribed rate and reinvest the money in his business after setting apart some portion for his own requirement. This goes on in a cyclical process. This open market policy has brought in remarkable progress to the economy of India development and trade and commerce have prospered significantly. New enterprises, new initiatives and new technologies have swamped the country. Thanks to the Indian Economy's journey from mixed economy to open economy policy.
