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Economic Developments in India Post-1991
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Economic Developments in India Post-1991

Created by
@LuckiestKazoo

Questions and Answers

What prompted the introduction of economic reforms in India in 1991?

  • Political instability in the region
  • Increased foreign investments
  • A surplus in food production
  • A crisis in balance of payments (correct)

    • Which of the following is NOT an objective of the economic reforms introduced in India?

  • Comprehending globalisation's process
  • Understanding the background of reform policies
  • Assessing the impact on various sectors
  • Increasing reliance on agriculture (correct)

    • What was India's economic approach prior to the reforms in 1991?

  • Purely capitalist economy
  • Market-oriented free economy
  • Laid-back agricultural focus
  • Planned economy with socialist characteristics (correct)

    • According to the former President K.R. Narayanan, what is a limitation of GDP as a measure of progress?

    <p>It does not account for income inequality</p> Signup and view all the answers

    Which of the following best describes the impact of economic reforms on agriculture?

    <p>Enhanced self-sufficiency in food grains</p> Signup and view all the answers

    What is the primary focus of the chapter mentioned in the passage?

    <p>Background of the economic crisis</p> Signup and view all the answers

    Which of these is a key mechanism through which the reform policies were implemented?

    <p>Deregulation of various industries</p> Signup and view all the answers

    What does the term 'globalisation' imply in the context of economic reforms?

    <p>Integration into the global economy</p> Signup and view all the answers

    What is a significant reason for the reduction of individual income taxes since 1991?

    <p>To promote voluntary disclosure of income</p> Signup and view all the answers

    How has the rate of corporation tax in India changed over the years?

    <p>It has been continuously reduced</p> Signup and view all the answers

    What was one of the main objectives of India's trade and investment policy reforms?

    <p>To enhance the efficiency of local industries</p> Signup and view all the answers

    What has replaced fixed monetary control over the value of the rupee since 1991?

    <p>Market-based determination of exchange rates</p> Signup and view all the answers

    What has been the impact of reducing individual income tax rates on savings?

    <p>It has encouraged savings and investment</p> Signup and view all the answers

    What was an essential aspect of the regime followed to protect domestic industries in India?

    <p>Strict control and high tariffs on imports</p> Signup and view all the answers

    What change was made regarding import licensing for hazardous industries?

    <p>Import licensing was abolished only for non-sensitive industries</p> Signup and view all the answers

    What strategy has been employed for the indirect taxes in India?

    <p>To reform indirect taxes for economic facilitation</p> Signup and view all the answers

    What was the primary objective of the liberalisation measures introduced after 1991?

    <p>To eliminate hindrances to growth and open various sectors</p> Signup and view all the answers

    Which of the following industries still retains public sector reservation after 1991?

    <p>Atomic energy generation</p> Signup and view all the answers

    Which areas experienced partial liberalisation measures in the 1980s?

    <p>Industrial licensing and foreign investment</p> Signup and view all the answers

    What was notable about the industrial licensing situation after 1991?

    <p>Almost all product categories had licensing abolished</p> Signup and view all the answers

    What role did the market play in most industries after the liberalisation reforms?

    <p>The market was allowed to determine the prices</p> Signup and view all the answers

    Which of the following was NOT mentioned as a specific product category from industrial licensing post-1991?

    <p>Textiles</p> Signup and view all the answers

    What was one of the significant outcomes of the financial sector reforms initiated in 1991?

    <p>Introduction of comprehensive fiscal policies</p> Signup and view all the answers

    Which sectors were primarily targeted for liberalisation after 1991?

    <p>Manufacturing and services</p> Signup and view all the answers

    What impact have the reform policies had on raising government revenue through customs duties?

    <p>Curtailed scope for raising revenue</p> Signup and view all the answers

    How are the proceeds from disinvestment typically used by the government?

    <p>To offset the shortage of government revenues</p> Signup and view all the answers

    What is a main criticism of the sale of public assets?

    <p>It underestimates the value of public sector enterprises</p> Signup and view all the answers

    What has been the effect of tax incentives offered to foreign investors?

    <p>Reduced scope for raising tax revenues</p> Signup and view all the answers

    What aspect of public expenditure has been affected by economic reforms according to critics?

    <p>Reduction in growth of public expenditure</p> Signup and view all the answers

    Which statement describes a view on globalization outlined in the content?

    <p>It provides an opportunity for enhanced global access.</p> Signup and view all the answers

    What is a potential positive result mentioned regarding large industries in developing countries?

    <p>They could become significant players in the international arena.</p> Signup and view all the answers

    How have tax reductions aimed at curbing tax evasion been perceived in relation to tax revenue?

    <p>They have resulted in a decline in tax revenues.</p> Signup and view all the answers

    What has intensified the trend of outsourcing in recent times?

    <p>Growth of Information Technology</p> Signup and view all the answers

    What type of services are often associated with outsourcing?

    <p>Voice-based business processes</p> Signup and view all the answers

    Which of the following companies is associated with oil and gas exploration and has projects in multiple countries?

    <p>ONGC Videsh</p> Signup and view all the answers

    Which company is listed as one of the top ten global steel companies and operates in 26 countries?

    <p>Tata Steel</p> Signup and view all the answers

    What does the term 'BPO' commonly refer to in the context of outsourcing?

    <p>Business Process Outsourcing</p> Signup and view all the answers

    Which of the following services can be outsourced effectively due to cost and skill factors?

    <p>Music recording</p> Signup and view all the answers

    How many countries does HCL Technologies have offices in, as mentioned?

    <p>31</p> Signup and view all the answers

    What is a major driver of globalisation according to the text?

    <p>Growth of fast modes of communication</p> Signup and view all the answers

    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.

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