Economic Reforms
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What were the three broad areas targeted by India's 1991 economic reforms?
The 1991 reforms focused on Liberalisation (reducing government controls), Privatisation (reducing the public sector's role), and Globalisation (integrating India with the world economy), collectively known as LPG reforms.
What was India's foreign exchange reserve position that led to the 1991 crisis?
India had reserves for only two weeks of imports.
Which committee's recommendations triggered the structural adjustment programme in India in 1991?
The Narasimham Committee on Financial Sector Reforms (1991) provided key recommendations, while the broader economic crisis led the government to initiate the New Economic Policy under the guidance of then Finance Minister Dr. Manmohan Singh.
Which year did India adopt the New Economic Policy (NEP)?
India adopted the New Economic Policy in 1991.
What was the primary Balance of Payments crisis that forced India to initiate economic reforms in 1991?
India's foreign exchange reserves fell to a critically low level of about $1 billion (sufficient for only 2–3 weeks of imports), forcing the government to pledge gold reserves and seek IMF assistance, triggering the 1991 reforms.
What is the 'Licence Raj' that was dismantled through India's economic reforms?
A system requiring government licences for industrial production and expansion.
What does the term 'Liberalisation' mean in the context of India's economic reforms?
Liberalisation refers to the removal or reduction of government restrictions and controls on private sector activities, including abolition of industrial licensing, deregulation of prices, and easing entry barriers for businesses.
What was the initial rate of customs duty reduced to during trade liberalisation in 1991?
Peak customs duty was reduced from over 300% to 150%.
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