Topic Details (Notes format)

Economic Reforms of 1991

Subject: Economics

Book: Comprehensive Indian Economy

In 1991, India faced a severe balance of payments crisis that triggered sweeping reforms known as Liberalization, Privatization, and Globalization (LPG). These reforms dismantled the license-quota system, opened markets to foreign investment, devalued the rupee for export competitiveness, and paved the way for private sector efficiency. The goal was to integrate India with the global economy and revive growth by reducing state controls. Exam-oriented insights include the reasons for the crisis, specifics of structural adjustment policies, and the impact on sectors like banking, trade, and manufacturing over subsequent decades.

Practice Questions

Which of the following is a direct tax?

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Which economic concept is described as “the next best alternative foregone”?

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Which of the following is an example of a capital receipt for the government?

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What is the meaning of “dumping” in international trade?

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What is the main objective of disinvestment in public sector undertakings (PSUs)?

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What does “primary sector” of the economy include?

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Which of the following is NOT a function of the World Trade Organization (WTO)?

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What is the main aim of Public Distribution System (PDS) in India?

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What is the meaning of "fiscal deficit"?

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Which term refers to the decrease in the value of a currency relative to foreign currencies?

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