One of the important goals of the economic liberalisation policy is to achieve full convertibility of the Indian rupee. This is being advocated because

The correct answer is Option 1.

Full convertibility of the Indian rupee is a significant goal of economic liberalization aimed at integrating the Indian economy with global markets. The primary rationale behind advocating for full convertibility (especially on the capital account) is that it allows market forces—demand and supply—to determine the currency's value. This market-linked mechanism helps in achieving an equilibrium exchange rate, which tends to stabilize the rupee's value against major global currencies like the USD or Euro in the long run by eliminating artificial administrative distortions.

While options 2, 3, and 4 represent potential secondary benefits of liberalization, they are not the definitive structural goal of convertibility itself:

• Foreign capital (Option 2) depends more on macroeconomic stability and ease of doing business.
• Export promotion (Option 3) is often driven by currency depreciation rather than convertibility alone.
• Loan terms (Option 4) are dictated by sovereign ratings and global interest rates.

Thus, Option 1 is the most fundamental objective, as convertibility ensures a transparent, stable, and market-driven exchange rate regime.