In the context of LPG reforms in India, the opening of the economy has led to a rapid ______.
I. increase in the foreign direct investment
II. decrease in the foreign exchange reserve
Show answer & explanation
Correct answer: A
Explanation
The LPG (Liberalization, Privatization, Globalization) reforms were implemented in 1991.
These reforms opened the Indian economy to the global market.
This led to an increase in Foreign Direct Investment (FDI).
New industries and investment opportunities expanded.
However, the foreign exchange reserves witnessed an increase rather than a decline.
Therefore, the second statement is incorrect.
Only the first statement is correct.