Question

Which one of the followings was NOT part of India’s economic reforms in 1991?

• A. Abolition of ‘License Raj’
• B. Encouragement of foreign investment
• C. Devaluation of Rupee
• D. Nationalisation of banks

Hint:

The 1991 reforms focused on liberalization, privatization, globalization, reduction of government control, and opening the economy to foreign investment.

Answer 1

The Correct Option is D

Step 1: Recall the 1991 economic reforms.
India introduced major economic reforms in 1991 to overcome the balance of payments crisis and to liberalize the economy. These reforms are commonly known as LPG reforms:
\[ L=\text{Liberalization} \] \[ P=\text{Privatization} \] \[ G=\text{Globalization} \]

Step 2: Analyze abolition of License Raj.
One major reform was the removal of industrial licensing requirements, popularly known as abolition of the License Raj.
Thus, option (A) was part of the reforms.

Step 3: Analyze encouragement of foreign investment.
The reforms encouraged Foreign Direct Investment (FDI) and foreign technology collaborations to integrate India with the global economy.
Thus, option (B) was part of the reforms.

Step 4: Analyze devaluation of Rupee.
The Indian Rupee was devalued in 1991 to improve export competitiveness and stabilize external payments.
Thus, option (C) was part of the reforms.

Step 5: Analyze nationalisation of banks.
Nationalisation of banks occurred earlier, mainly in \(1969\) and \(1980\), not during the 1991 reforms.
In fact, the 1991 reforms moved toward liberalization and privatization rather than further nationalization.
Thus, option (D) was not part of the reforms.

Step 6: Final conclusion.
Therefore, the measure that was NOT part of India’s economic reforms in 1991 is
\[ \boxed{\text{Nationalisation of banks}} \]