When were the economic reforms (New Economic Policy) introduced in India?
Show Hint
- 1985
- 1991
- 1999
- 2001
The Correct Option is B
Solution and Explanation
India's pre-1991 economy was characterized by a License Raj, heavy government intervention, and a closed economy. A severe balance of payments crisis forced India to restructure its economic policy.
Step 2: Detailed Explanation:
In 1991, under Finance Minister Dr. Manmohan Singh and PM P.V. Narasimha Rao, India introduced the New Economic Policy (NEP) comprising three major pillars:
- Liberalisation: Removing restrictions on industries and trade.
- Privatisation: Disinvestment of Public Sector Undertakings.
- Globalisation: Opening up the economy to foreign trade and investment.
This policy was partly driven by conditionalities attached to an IMF loan to tide over the 1991 foreign exchange crisis.
Step 3: Final Answer:
Economic Reforms (New Economic Policy -- LPG) were introduced in 1991.
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