Liberalisation, Privatisation and Globalisation: An Appraisal

Comprehensive practice questions covering the background, policies, and impacts of India's 1991 economic reforms including Liberalisation, Privatisation, and Globalisation.

What event in $1991$ forced the Indian government to introduce a new set of policy measures?

An economic crisis relating to external debt where the government could not repay borrowings from abroad and foreign exchange reserves dropped to levels insufficient for even a fortnight.

How much loan did India receive from the International Bank for Reconstruction and Development (IBRD) and the International Monetary Fund (IMF) to manage the crisis?

$7$ billion.

What are the two broad classifications of the New Economic Policy (NEP)?

Stabilisation measures (short-term) and structural reform measures (long-term).

Identify the six product categories where industrial licensing was NOT abolished after $1991$.

Alcohol, cigarettes, hazardous chemicals, industrial explosives, electronics, aerospace, and drugs and pharmaceuticals.

Which three industries are currently reserved exclusively for the public sector?

Defence equipments, atomic energy generation, and railway transport.

What was the major shift in the role of the Reserve Bank of India (RBI) following financial sector reforms?

The role changed from being a regulator to a facilitator of the financial sector.

What is the limit for foreign investment in banks after the reform policies?

Around $50$ per cent.

Define 'Disinvestment' according to the transcript.

The privatisation of public sector undertakings (PSUs) by selling off part of the equity of PSUs to the public.

What special status was granted to nine PSUs in $1996$ to improve efficiency and professionalism?

Navaratna status.

Which organization was the predecessor to the World Trade Organisation (WTO)?

The General Agreement on Trade and Tariff (GATT), established in $1948$.

Why has India become a favored destination for global outsourcing?

Due to low wage rates and the availability of skilled manpower.

According to Table $3.1$, what was the growth rate of the GDP during the period $1980$ to $1991$?

$5.6$ per cent.

What was the immediate foreign exchange measure taken in $1991$ to resolve the balance of payments crisis?

The rupee was devalued against foreign currencies.

Total foreign exchange reserves in India increased from US $6$ billion in $1990-91$ to how much in $2004-05$?

US $125$ billion.

What specific impact did the removal of fertiliser subsidies have on agriculture?

It led to an increase in the cost of production, which severely affected small and marginal farmers.

What is the primary reason cited for the slowdown in industrial growth during the reform period?

Decreasing demand for industrial products due to cheaper imports and inadequate investment in infrastructure.