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Questions and Answers
What prompted the introduction of economic reforms in India in 1991?
What prompted the introduction of economic reforms in India in 1991?
Which of the following is NOT an objective of the economic reforms introduced in India?
Which of the following is NOT an objective of the economic reforms introduced in India?
What was India's economic approach prior to the reforms in 1991?
What was India's economic approach prior to the reforms in 1991?
According to the former President K.R. Narayanan, what is a limitation of GDP as a measure of progress?
According to the former President K.R. Narayanan, what is a limitation of GDP as a measure of progress?
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Which of the following best describes the impact of economic reforms on agriculture?
Which of the following best describes the impact of economic reforms on agriculture?
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What is the primary focus of the chapter mentioned in the passage?
What is the primary focus of the chapter mentioned in the passage?
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Which of these is a key mechanism through which the reform policies were implemented?
Which of these is a key mechanism through which the reform policies were implemented?
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What does the term 'globalisation' imply in the context of economic reforms?
What does the term 'globalisation' imply in the context of economic reforms?
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What is a significant reason for the reduction of individual income taxes since 1991?
What is a significant reason for the reduction of individual income taxes since 1991?
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How has the rate of corporation tax in India changed over the years?
How has the rate of corporation tax in India changed over the years?
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What was one of the main objectives of India's trade and investment policy reforms?
What was one of the main objectives of India's trade and investment policy reforms?
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What has replaced fixed monetary control over the value of the rupee since 1991?
What has replaced fixed monetary control over the value of the rupee since 1991?
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What has been the impact of reducing individual income tax rates on savings?
What has been the impact of reducing individual income tax rates on savings?
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What was an essential aspect of the regime followed to protect domestic industries in India?
What was an essential aspect of the regime followed to protect domestic industries in India?
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What change was made regarding import licensing for hazardous industries?
What change was made regarding import licensing for hazardous industries?
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What strategy has been employed for the indirect taxes in India?
What strategy has been employed for the indirect taxes in India?
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What was the primary objective of the liberalisation measures introduced after 1991?
What was the primary objective of the liberalisation measures introduced after 1991?
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Which of the following industries still retains public sector reservation after 1991?
Which of the following industries still retains public sector reservation after 1991?
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Which areas experienced partial liberalisation measures in the 1980s?
Which areas experienced partial liberalisation measures in the 1980s?
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What was notable about the industrial licensing situation after 1991?
What was notable about the industrial licensing situation after 1991?
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What role did the market play in most industries after the liberalisation reforms?
What role did the market play in most industries after the liberalisation reforms?
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Which of the following was NOT mentioned as a specific product category from industrial licensing post-1991?
Which of the following was NOT mentioned as a specific product category from industrial licensing post-1991?
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What was one of the significant outcomes of the financial sector reforms initiated in 1991?
What was one of the significant outcomes of the financial sector reforms initiated in 1991?
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Which sectors were primarily targeted for liberalisation after 1991?
Which sectors were primarily targeted for liberalisation after 1991?
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What impact have the reform policies had on raising government revenue through customs duties?
What impact have the reform policies had on raising government revenue through customs duties?
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How are the proceeds from disinvestment typically used by the government?
How are the proceeds from disinvestment typically used by the government?
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What is a main criticism of the sale of public assets?
What is a main criticism of the sale of public assets?
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What has been the effect of tax incentives offered to foreign investors?
What has been the effect of tax incentives offered to foreign investors?
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What aspect of public expenditure has been affected by economic reforms according to critics?
What aspect of public expenditure has been affected by economic reforms according to critics?
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Which statement describes a view on globalization outlined in the content?
Which statement describes a view on globalization outlined in the content?
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What is a potential positive result mentioned regarding large industries in developing countries?
What is a potential positive result mentioned regarding large industries in developing countries?
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How have tax reductions aimed at curbing tax evasion been perceived in relation to tax revenue?
How have tax reductions aimed at curbing tax evasion been perceived in relation to tax revenue?
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What has intensified the trend of outsourcing in recent times?
What has intensified the trend of outsourcing in recent times?
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What type of services are often associated with outsourcing?
What type of services are often associated with outsourcing?
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Which of the following companies is associated with oil and gas exploration and has projects in multiple countries?
Which of the following companies is associated with oil and gas exploration and has projects in multiple countries?
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Which company is listed as one of the top ten global steel companies and operates in 26 countries?
Which company is listed as one of the top ten global steel companies and operates in 26 countries?
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What does the term 'BPO' commonly refer to in the context of outsourcing?
What does the term 'BPO' commonly refer to in the context of outsourcing?
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Which of the following services can be outsourced effectively due to cost and skill factors?
Which of the following services can be outsourced effectively due to cost and skill factors?
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How many countries does HCL Technologies have offices in, as mentioned?
How many countries does HCL Technologies have offices in, as mentioned?
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What is a major driver of globalisation according to the text?
What is a major driver of globalisation according to the text?
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Study Notes
Economic Developments in India Post-1991
- India developed a robust industrial base and achieved self-sufficiency in food grain production after decades of planned development.
- Despite industrial progress, a significant portion of the population remained reliant on agriculture for livelihood.
- A balance of payments crisis in 1991 prompted major economic reforms in the country.
Key Reforms: Liberalisation, Privatisation, and Globalisation
- The reforms initiated in 1991 aimed to shift India's economic policies from a mixed economy towards greater market orientation.
- Former President K.R. Narayanan emphasized that GDP is not a sole indicator of societal progress, highlighting the need for holistic development.
Liberalisation
- Restrictions that hindered economic growth were removed, allowing more freedom in various economic sectors.
- Industrial licensing was abolished for nearly all sectors, with exceptions for fewer industries (e.g., atomic energy, hazardous chemicals).
- The deregulation led to market-driven pricing across most industries.
Financial Sector Reforms
- Introduction of policies aimed at reducing high direct taxes on individuals and corporations to encourage savings and voluntary income disclosure.
- Continuous reductions in corporate tax rates were implemented to enhance international competitiveness.
- Indirect tax reforms aimed at facilitating trade through smoother tax processes.
Trade and Investment Policies
- Trade liberalisation involved reducing tariffs and eliminating import licensing, except for sensitive industries.
- Government sought to boost domestic and foreign investments, promoting local industries' efficiency and adoption of modern technologies.
Globalisation
- Globalisation has fostered interdependence and integration in the global economy, transcending geographical and social boundaries.
- The rise of Information Technology (IT) enabled services like Business Process Outsourcing (BPO), enhancing cost-effectiveness and skill utilization.
Case Studies of Indian Companies
- ONGC Videsh operates oil and gas projects in 16 countries, showcasing global expansion of Indian enterprises.
- Tata Steel ranks among the top global steel producers with operations in 26 countries and sales in 50.
- HCL Technologies employs 15,000 people abroad with offices in 31 countries, reflecting the IT sector's growth on a global scale.
- Dr. Reddy's Laboratories evolved from a small supplier to a global manufacturer with facilities worldwide.
Challenges and Criticism
- Critics argue that privatisation has led to undervaluation and loss of public sector assets, causing revenue declines from customs duties.
- Tax incentives for foreign investors may reduce government revenues, impacting social and developmental spending.
- The emphasis on efficiency through privatisation raises questions about the best strategies for enhancing public sector efficiency.
Conclusion
- Globalisation and reform policies have resulted in both positive and negative outcomes for India, providing opportunities for access to global markets and technology while presenting challenges in revenue generation and social welfare investments.
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Description
This quiz explores the significant economic developments in India after the 1991 liberalization reforms. It covers the transition to a more market-oriented economy, the implications of these changes on the agricultural sector, and the balance of payments crisis that spurred these reforms. Test your knowledge on the key aspects of India's economic transformation.
