Which of the following is a structural reform under the 1991 policy?
Show answer & explanation
Correct answer: C
Explanation
Correct Answer:
Privatization of Public Sector Units
Explanation:
Under the New Economic Policy of 1991, India introduced several structural reforms to make the economy more efficient and competitive. Privatization of public sector units was a major structural reform aimed at increasing private sector participation and reducing government control over businesses.
Key Points:
• The 1991 New Economic Policy is based on LPG (Liberalization, Privatization, and Globalization).
• Privatization was an important component of structural reforms.
• Its objective was to reduce government intervention in economic activities.
• It aimed to improve efficiency and competitiveness in the economy.
Additional Facts:
• India faced a severe Balance of Payments crisis in 1991.
• Economic reforms were introduced in 1991 to address the crisis.
• Liberalization, Privatization, and Globalization were the three pillars of these reforms.
Important Questions:
Q1: What are the three main pillars of the 1991 New Economic Policy?
Ans: Liberalization, Privatization, and Globalization.
Q2: What is the meaning of privatization?
Ans: Increasing private sector participation in public sector enterprises.
Q3: Why was the 1991 Economic Policy introduced?
Ans: To overcome the economic crisis and strengthen the Indian economy.