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What were the main reforms undertaken under the New Economic Policy of the early 1990s? 1. Trade liberalization 2. Public Sector Disinvestment 3. Poverty Alleviation 4. Rapid industrialization Select the answer using the code given below:
Explanation
The New Economic Policy (NEP) of 1991, often referred to as the LPG (Liberalization, Privatization, and Globalization) model, focused on dismantling the 'License Raj' and integrating India with the global economy [1]. Trade liberalization was a core component, involving the reduction of import duties, removal of quantitative restrictions, and devaluation of the rupee to boost exports [1]. Public Sector Disinvestment was another key reform, where the government reduced the number of industries reserved for the public sector and sold stakes in Public Sector Undertakings (PSUs) to private entities [1]. While poverty alleviation and rapid industrialization were long-term goals or outcomes of these reforms, they were not the immediate policy 'reforms' themselves; rather, the reforms focused on structural changes like de-licensing and market deregulation [2]. Therefore, only statements 1 and 2 represent the direct reforms undertaken.
Sources
- [1] https://www.gacbe.ac.in/pdf/ematerial/18MEC12C-U4.pdf
- [2] Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 12: Indian Industry > NEW INDUSTRIAL POLICY (NIP), 1991 > p. 379