ECONOMIC REFORMS SINCE 1991
Q. Why were reforms introduced in India
Fiscal deficit
In the late 1980s government expenditure begin to exceed revenues of government as
government has to spend money on difference social and economic development
which did not provide immediate return
Decline in foreign exchange reserve
Foreign exchange reserve which India maintained to import petrol and other items was
declined to the level which was not sufficient to finance import for more than two weeks
or to pay interest on the boring from international money lenders
inflationary pressure
Prices of many essential commodities Rose sharply in 1980s
Poor return of public sector
overall performance of public sector was not satisfactory deal 1990. The income from
public sector undertaking was not very high to meet the growing expenditure of the
government.
LIBERALISATION
Q. What is liberalisation ? why was it necessary to introduce liberalisation in Indian
economy
Liberalisation means either removal or minimising the government’s restriction and
regulation over economic activities in order to promote economic development.
It was necessary to introduce in India due to following reason:
A) To introduce more competitive environment in the domestic economy and to
provide incentive to domestic producers for increasing their efficiency level
B) to increase the private sector’s participation in the development of Indian
economy.
C) To increase the volume of foreign direct investment (FDI) to increase foreign
exchange reserve in the country.
(INDUSTRIAL REFORM)
Q. Explain deregulation of industrial sector under NEP 1991.
Q. Why were reforms introduced in India
Fiscal deficit
In the late 1980s government expenditure begin to exceed revenues of government as
government has to spend money on difference social and economic development
which did not provide immediate return
Decline in foreign exchange reserve
Foreign exchange reserve which India maintained to import petrol and other items was
declined to the level which was not sufficient to finance import for more than two weeks
or to pay interest on the boring from international money lenders
inflationary pressure
Prices of many essential commodities Rose sharply in 1980s
Poor return of public sector
overall performance of public sector was not satisfactory deal 1990. The income from
public sector undertaking was not very high to meet the growing expenditure of the
government.
LIBERALISATION
Q. What is liberalisation ? why was it necessary to introduce liberalisation in Indian
economy
Liberalisation means either removal or minimising the government’s restriction and
regulation over economic activities in order to promote economic development.
It was necessary to introduce in India due to following reason:
A) To introduce more competitive environment in the domestic economy and to
provide incentive to domestic producers for increasing their efficiency level
B) to increase the private sector’s participation in the development of Indian
economy.
C) To increase the volume of foreign direct investment (FDI) to increase foreign
exchange reserve in the country.
(INDUSTRIAL REFORM)
Q. Explain deregulation of industrial sector under NEP 1991.
