Podcast
Questions and Answers
Prior to 1991, India's economic strategy primarily involved:
Prior to 1991, India's economic strategy primarily involved:
- A socialist economic system with complete state control over resources.
- An isolationist economic policy with limited international trade.
- A purely capitalist approach with minimal government intervention.
- A mixed economy framework combining elements of capitalism and socialism. (correct)
Which of the following factors significantly contributed to the economic crisis India faced in 1991?
Which of the following factors significantly contributed to the economic crisis India faced in 1991?
- A surplus in the balance of payments due to high export volumes.
- Inability to repay external debts and critically low foreign exchange reserves. (correct)
- Decline in agricultural output causing widespread famine and economic instability.
- A sharp decrease in domestic savings leading to reduced investment.
Some scholars argue that the pre-1991 economic policies in India:
Some scholars argue that the pre-1991 economic policies in India:
- Established unnecessary rules and laws that hindered economic growth. (correct)
- Effectively promoted rapid economic growth and development across all sectors.
- Led to a completely self-reliant economy with no dependence on foreign trade.
- Had no impact on the overall economic performance of the country.
Despite the economic progress made before 1991, a significant challenge that remained was:
Despite the economic progress made before 1991, a significant challenge that remained was:
The introduction of economic reforms in 1991 was primarily a response to:
The introduction of economic reforms in 1991 was primarily a response to:
Which of the following describes India's economic condition immediately preceding the 1991 reforms?
Which of the following describes India's economic condition immediately preceding the 1991 reforms?
The period before 1991 saw India achieving which of the following milestones?
The period before 1991 saw India achieving which of the following milestones?
What was the immediate impact of the economic crisis of 1991 on India's developmental strategies?
What was the immediate impact of the economic crisis of 1991 on India's developmental strategies?
During the economic challenges of the late 1980s in India, what was a critical factor that made government expenditure unsustainable?
During the economic challenges of the late 1980s in India, what was a critical factor that made government expenditure unsustainable?
Which of the following accurately describes the state of India's foreign exchange reserves in the late 1980s during the financial crisis?
Which of the following accurately describes the state of India's foreign exchange reserves in the late 1980s during the financial crisis?
In response to the financial crisis, which international institutions did India approach for financial assistance?
In response to the financial crisis, which international institutions did India approach for financial assistance?
Which of the following reflects a primary intention behind establishing Central Public Sector Enterprises (CPSEs) in India during the 1950s and 1960s?
Which of the following reflects a primary intention behind establishing Central Public Sector Enterprises (CPSEs) in India during the 1950s and 1960s?
Why were development policies in India during the 1980s contributing to economic strain, despite their intentions?
Why were development policies in India during the 1980s contributing to economic strain, despite their intentions?
What was a significant problem with how India used its foreign exchange reserves during the economic challenges of the 1980s?
What was a significant problem with how India used its foreign exchange reserves during the economic challenges of the 1980s?
The granting of 'Maharatna', 'Navratna', and 'Miniratna' status to CPSEs is primarily aimed at:
The granting of 'Maharatna', 'Navratna', and 'Miniratna' status to CPSEs is primarily aimed at:
Which factor contributed to the increase in prices of essential goods in India during the late 1980s?
Which factor contributed to the increase in prices of essential goods in India during the late 1980s?
Some scholars criticize the government's actions towards CPSEs, suggesting that instead of supporting their growth. The scholars allege the result was:
Some scholars criticize the government's actions towards CPSEs, suggesting that instead of supporting their growth. The scholars allege the result was:
In the context of CPSEs, what does 'disinvestment' generally refer to?
In the context of CPSEs, what does 'disinvestment' generally refer to?
During the financial crisis, government spending on which sectors did not provide immediate revenue returns, contributing to the economic strain?
During the financial crisis, government spending on which sectors did not provide immediate revenue returns, contributing to the economic strain?
What was a major consequence of India's economic policies in the 1980s regarding its international financial standing?
What was a major consequence of India's economic policies in the 1980s regarding its international financial standing?
Currently, the government's stated approach towards Maharatna, Navratna, and Miniratna CPSEs involves:
Currently, the government's stated approach towards Maharatna, Navratna, and Miniratna CPSEs involves:
What is a valid concern regarding the privatization of profitable CPSEs?
What is a valid concern regarding the privatization of profitable CPSEs?
Which of the following is the best definition of globalisation?
Which of the following is the best definition of globalisation?
Suppose a CPSE is consistently incurring losses. According to the information, how are these losses typically addressed?
Suppose a CPSE is consistently incurring losses. According to the information, how are these losses typically addressed?
Based on the data provided, which sector consistently outperformed the others in terms of growth rate throughout the period of 1992-2015?
Based on the data provided, which sector consistently outperformed the others in terms of growth rate throughout the period of 1992-2015?
How did the growth rate of the agricultural sector change in 2014-15 compared to the preceding year 2013-14?
How did the growth rate of the agricultural sector change in 2014-15 compared to the preceding year 2013-14?
Which period saw the highest growth in GDP, indicating a peak in economic expansion during the post-reform era?
Which period saw the highest growth in GDP, indicating a peak in economic expansion during the post-reform era?
Which of the following statements best describes the performance of the industrial sector post-1991?
Which of the following statements best describes the performance of the industrial sector post-1991?
Which of the following best explains why GDP growth in India post-1991 has not translated into a proportionate increase in employment opportunities?
Which of the following best explains why GDP growth in India post-1991 has not translated into a proportionate increase in employment opportunities?
How does Gross Value Added (GVA) relate to GDP, according to the note provided?
How does Gross Value Added (GVA) relate to GDP, according to the note provided?
Which of the following trends is evident in the Indian economy's sectoral growth rates during the reform period?
Which of the following trends is evident in the Indian economy's sectoral growth rates during the reform period?
What has been the primary consequence of reducing import duties on agricultural products in India since 1991?
What has been the primary consequence of reducing import duties on agricultural products in India since 1991?
If the trend from 2012-15 continued, what could be a potential concern for the Indian economy?
If the trend from 2012-15 continued, what could be a potential concern for the Indian economy?
How has the partial removal of fertiliser subsidies affected small and marginal farmers in India?
How has the partial removal of fertiliser subsidies affected small and marginal farmers in India?
What is the most likely outcome of Indian agriculture shifting from food grain production to export-oriented cash crop production?
What is the most likely outcome of Indian agriculture shifting from food grain production to export-oriented cash crop production?
Considering the information provided, how did the opening of the economy influence foreign investment in India?
Considering the information provided, how did the opening of the economy influence foreign investment in India?
Which of the following factors has contributed most significantly to the slowdown in industrial growth in India post-1991?
Which of the following factors has contributed most significantly to the slowdown in industrial growth in India post-1991?
How do high non-tariff barriers in developed countries' markets typically affect developing countries like India?
How do high non-tariff barriers in developed countries' markets typically affect developing countries like India?
Which of the following scenarios would best exemplify globalisation creating conditions that adversely affect local industries in developing countries?
Which of the following scenarios would best exemplify globalisation creating conditions that adversely affect local industries in developing countries?
In what respect did the reforms NOT benefit agriculture?
In what respect did the reforms NOT benefit agriculture?
The economic reforms of 1991 in India were primarily a response to what set of overlapping economic challenges?
The economic reforms of 1991 in India were primarily a response to what set of overlapping economic challenges?
How did the Indian government aim to improve the performance of the public sector during the 1991 reforms?
How did the Indian government aim to improve the performance of the public sector during the 1991 reforms?
Which of the following best describes the concept of globalisation in the context of the provided content?
Which of the following best describes the concept of globalisation in the context of the provided content?
What is the primary objective of the World Trade Organization (WTO)?
What is the primary objective of the World Trade Organization (WTO)?
Which sectors experienced a decline in growth during the economic reforms, as highlighted in the content?
Which sectors experienced a decline in growth during the economic reforms, as highlighted in the content?
What argument do critics of globalisation make regarding its impact on developing countries?
What argument do critics of globalisation make regarding its impact on developing countries?
According to the Indian context presented, what factor exacerbated inequalities during the 1990s crisis?
According to the Indian context presented, what factor exacerbated inequalities during the 1990s crisis?
Which sectors primarily benefited from increased income and consumption quality following the economic reforms?
Which sectors primarily benefited from increased income and consumption quality following the economic reforms?
Flashcards
Economic Reforms 1991
Economic Reforms 1991
A set of policy measures introduced in India to address a balance of payments crisis.
Liberalisation
Liberalisation
The process of reducing government restrictions on the economy to promote free market principles.
Privatisation
Privatisation
The transfer of ownership of a business or public service from the government to private individuals or organizations.
Globalisation
Globalisation
Signup and view all the flashcards
Mixed Economy
Mixed Economy
Signup and view all the flashcards
Balance of Payments Crisis
Balance of Payments Crisis
Signup and view all the flashcards
Economic Stagnation
Economic Stagnation
Signup and view all the flashcards
Agricultural Output Expansion
Agricultural Output Expansion
Signup and view all the flashcards
Indian economy 1980s
Indian economy 1980s
Signup and view all the flashcards
Government borrowing
Government borrowing
Signup and view all the flashcards
Deficit financing
Deficit financing
Signup and view all the flashcards
Trade balance
Trade balance
Signup and view all the flashcards
Profligate spending
Profligate spending
Signup and view all the flashcards
Foreign exchange reserves
Foreign exchange reserves
Signup and view all the flashcards
International Bank for Reconstruction and Development (IBRD)
International Bank for Reconstruction and Development (IBRD)
Signup and view all the flashcards
International Monetary Fund (IMF)
International Monetary Fund (IMF)
Signup and view all the flashcards
Maharatnas
Maharatnas
Signup and view all the flashcards
Navratnas
Navratnas
Signup and view all the flashcards
Miniratnas
Miniratnas
Signup and view all the flashcards
Disinvestment
Disinvestment
Signup and view all the flashcards
Foreign Direct Investment (FDI)
Foreign Direct Investment (FDI)
Signup and view all the flashcards
Public Sector Enterprises (PSEs)
Public Sector Enterprises (PSEs)
Signup and view all the flashcards
Self-reliance in economy
Self-reliance in economy
Signup and view all the flashcards
GDP Growth Rate
GDP Growth Rate
Signup and view all the flashcards
Employment Opportunities
Employment Opportunities
Signup and view all the flashcards
Reforms in Agriculture
Reforms in Agriculture
Signup and view all the flashcards
Impact of Subsidies
Impact of Subsidies
Signup and view all the flashcards
Export-oriented Policy
Export-oriented Policy
Signup and view all the flashcards
Industrial Growth Slowdown
Industrial Growth Slowdown
Signup and view all the flashcards
Competitive Imports
Competitive Imports
Signup and view all the flashcards
Non-Tariff Barriers
Non-Tariff Barriers
Signup and view all the flashcards
Gross Domestic Product (GDP)
Gross Domestic Product (GDP)
Signup and view all the flashcards
Sector Growth Rates
Sector Growth Rates
Signup and view all the flashcards
Agriculture Growth Rate (2012-15)
Agriculture Growth Rate (2012-15)
Signup and view all the flashcards
Industrial Sector Performance
Industrial Sector Performance
Signup and view all the flashcards
Service Sector Dominance
Service Sector Dominance
Signup and view all the flashcards
Post-1991 Economic Reforms
Post-1991 Economic Reforms
Signup and view all the flashcards
Economic Assessment
Economic Assessment
Signup and view all the flashcards
Crisis in Weaving Industry
Crisis in Weaving Industry
Signup and view all the flashcards
Economic Disparities
Economic Disparities
Signup and view all the flashcards
Impact of Globalization
Impact of Globalization
Signup and view all the flashcards
1991 Economic Reforms
1991 Economic Reforms
Signup and view all the flashcards
Service Sector Growth
Service Sector Growth
Signup and view all the flashcards
Outsourcing
Outsourcing
Signup and view all the flashcards
WTO Objectives
WTO Objectives
Signup and view all the flashcards
Role of Public Sector
Role of Public Sector
Signup and view all the flashcards
Study Notes
Unit II: Economic Reforms Since 1991
- India achieved a strong industrial base and became self-sufficient in food grain production after 40 years of planned development
- However, a large portion of the population still relies on agriculture for their livelihood
- A 1991 balance of payments crisis led to economic reforms in India
- This unit assesses the reform process and its implications for India's economy
Liberalisation, Privatisation, and Globalisation: An Appraisal
- Studying this chapter helps learners understand the background of India's 1991 reform policies
- It examines how these policies were implemented
- The chapter explores globalisation's effects on India
- It analyses the impact of reform policies across various sectors of the Indian economy
Introduction
- Economic development is not solely measured by GDP
- India adopted a mixed economic system post-independence, combining capitalist and socialist approaches
- This approach had various rules and regulations that, in some scholars' view, hindered economic growth
- Others argue that the approach helped foster growth in various sectors including agriculture
Background
- India's 1980s economic management was inefficient
- Government expenditure often exceeded income, leading to borrowing to finance the deficit
- This financial crisis led to a decrease in foreign exchange reserves and an inability to meet external debt obligations
- Rising prices of essential goods further exacerbated the crisis
Liberalisation
- Economic restrictions and regulations were major hindrances in growth
- Liberalisation measures were introduced, starting in the 1980s, to address these limitations
- Key elements of 1991 reforms included removal of industrial licensing restrictions, easing import policies, and deregulating multiple sectors
Privatisation
- Privatisation involved reducing the government's ownership or management role in public sector enterprises
- This could happen through the sale of public sector companies or the withdrawal of government involvement in their management
- The government's goal was improved financial discipline and modernisation through private capital and managerial abilities
Globalisation
- Globalisation represents the integration of a country's economy into the world economy
- It encompasses the growth of international economic networks, activities transcending geographical boundaries, and increased interdependence
- Aspects like outsourcing and the growth of multinational corporations are interconnected with globalisation
Tax Reforms
- Tax reforms aim to improve the government's taxation and public expenditure policies
- Direct taxes, impacting individuals and businesses, and indirect taxes, levied on goods and services, are both addressed
- Efforts were made to streamline tax systems for better compliance, reducing evasion, and promoting increased government revenue
Trade and Investment Policy Reforms
- Liberalising trade and investment is intended to bolster the competitiveness of India's industries by reducing trading restrictions
- Policies aim to draw foreign investment and technology imports into local firms
Reforms in Agriculture
- Agricultural growth rates have decreased due to a range of factors
- Removal of fertiliser subsidies increased production costs, negatively affecting small and marginal farmers
- Reduced import tariffs on agriculture goods meant stiff global competition
Reforms in Industry
- Industrial growth has slowed down due to numerous reasons, primarily cheaper imports and lower investments
- Lack of government support in infrastructure and rising competition
- Developing countries often struggle to retain market share against established competitors.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Related Documents
Description
Explore India's economic reforms since 1991, triggered by a balance of payments crisis. Understand liberalisation, privatisation and globalisation and their impact. Assess how these policies affect various sectors of the Indian economy.
