buzzzzzzzzzzzzzzzzzzzziness

lets begin the day with whetting my business know how. well today morning i read a wonderful article about the comparison on economy boom of the mid 90's and that of present. so i guess i should share some of my understandings with you all because it rarely happens that i understand the economic jargons and fundaes and that i have got some of them , how can i spare you . well the article touched upon some of the major changes that happened in 1991 under our present prime minister, manmohan singh as finance minister. few changes like the end of licence raj , though i still have doubts as to why or how licence system ended because we still need to pay a licencing fee as in telecom sector. anyways on comparing the present boom and analysing the vulnerability of it , it discussed few reasons of the stability of the bull run . first major reason is that though the growth rate of both the booms was on an average above 7 percent , which continued for 3 consecutive years , but the difference is that in inflation rate , which was hovering around 8 percent in 90's whereas at present it is below 5 percent. that shows that there is a balace in demand and supply. now in the past we had high import barriers which were regarded as the protective measure o the domestic industry, but actually was the root cause to the instability.let me explain why....
whenever there is shortage of supply , and unable to satiate the domestic demand , it marks in the increase of inflation. now in 90's when such conditions prevailed , the RBI had to increase the interest rates so as to curb the demand supply chain, which in turn led to pestilential effects on the industry which needs capital to raise its production.
but today as the import barriers are low instead of raising the lending rates , government can import the needed items and can supplement the demands.
but the catch is that there is a thin line between lowering the import barriers and protecting the domestic industry. as in the case of retail industry which is at crossroads whether to open the markets for foriegn players.
i am still a novice in my economic understandings . so please correct me if any of my above belief is fallacious