Indian Economy Chapter 21 Mock Test – Economic Reforms 1991 (30 MCQs)
KYASC INSTITUTE
Indian Economy Chapter 21 Mock Test
Economic Reforms 1991
Economic Reforms of 1991 were a major turning point in the history of the Indian economy. Before 1991, India followed a closed economic system with strict government control over industries, trade and investment. However, during the late 1980s and early 1990s, the Indian economy faced a severe balance of payments crisis. Foreign exchange reserves fell drastically and the country was on the verge of economic collapse.
To overcome this crisis, the Government of India introduced a series of economic reforms in 1991 under the leadership of Prime Minister P. V. Narasimha Rao and Finance Minister Dr. Manmohan Singh. These reforms aimed to liberalize the Indian economy and integrate it with the global economy.
The reforms were mainly based on three important principles known as LPG reforms — Liberalization, Privatization and Globalization. Liberalization reduced government control over industries and allowed more freedom for private sector businesses. Privatization encouraged the participation of private companies in sectors previously controlled by the government. Globalization opened the Indian economy to foreign trade, foreign investment and international markets.
These reforms significantly improved India's economic growth, increased foreign investment, expanded industries and improved the overall efficiency of the economy. Economic reforms also helped India become one of the fastest growing economies in the world. Understanding the economic reforms of 1991 is extremely important for competitive examinations such as UPSC, SSC, CDS, Banking and State Public Service Commission exams.
Instructions
- Total Questions: 30
- No Negative Marking
- Select the correct answer
- Click Finish Test to generate certificate