MCQs on Economic Reforms and Policies – Indian Geography
Q1. In which year were the economic reforms introduced in India?
a) 1985
b) 1991
c) 1995
d) 2000
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Correct Answer: b) 1991
Explanation: The economic reforms were introduced in India in 1991 to address the financial crisis and promote economic growth.
Key features of economic reform-1991
Delicencing : Only six industries were kept under Licencing scheme.
Entry to Private Sector : The role of public sector was limited only to four industries: rest all the industries were opened for private sector also.
Disinvestment: Disinvestment was carried out in many public sector enterprises.
Liberalisation of Foreign Policy : The limit of foreign equity was raised to 100% in many activities, i.e., NRI and foreign investors were permitted to invest in Indian companies.
Liberalisation in Technical Area : Automatic permission was given to Indian companies for signing technology agreements with foreign companies.
Setting up of Foreign Investment Promotion Board (FIPB) : This board was set up to promote and bring foreign investment in India.
Setting up of Small Scale Industries : Various benefits were offered to small scale industries.
Q2. Who was the Prime Minister of India when the economic reforms were introduced in 1991?
a) Rajiv Gandhi
b) P.V. Narasimha Rao
c) Atal Bihari Vajpayee
d) Indira Gandhi
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Correct Answer: b) P.V. Narasimha Rao
Explanation: P.V. Narasimha Rao was the Prime Minister of India when the economic reforms were introduced in 1991.
Q3. Who was the Finance Minister of India during the introduction of economic reforms in 1991?
a) Yashwant Sinha
b) P. Chidambaram
c) Manmohan Singh
d) Arun Jaitley
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Correct Answer: c) Manmohan Singh
Explanation: Dr. Manmohan Singh was the Finance Minister of India during the introduction of economic reforms in 1991.
Q4. What are the three main objectives of the economic reforms introduced in India in 1991?
a) Liberalization, Privatization, and Globalization
b) Nationalization, Industrialization, and Modernization
c) Inflation control, Fiscal consolidation, and Employment generation
d) Infrastructure development, Social welfare, and Environmental protection
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Correct Answer: a) Liberalization, Privatization, and Globalization
Explanation: The three main objectives of the economic reforms introduced in India in 1991 were Liberalization, Privatization, and Globalization (LPG).
Q5. Which of the following sectors was opened to private players as a part of the economic reforms in India?
a) Telecommunications
b) Railways
c) Defense
d) Agriculture
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Correct Answer: a) Telecommunications
Explanation: The telecommunications sector was opened to private players as a part of the economic reforms in India.
Q6. Which of the following is a result of the economic reforms introduced in India in 1991?
a) Increase in foreign direct investment (FDI)
b) Decrease in the growth rate of GDP
c) Increase in the fiscal deficit
d) Decrease in exports
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Correct Answer: a) Increase in foreign direct investment (FDI)
Explanation: The economic reforms introduced in India in 1991 led to an increase in foreign direct investment (FDI).
Q7. Which of the following policies was introduced in India as a part of the economic reforms in 1991 to promote exports?
a) Export-Import (EXIM) Policy
b) Foreign Trade Policy
c) Industrial Policy
d) Fiscal Policy
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Correct Answer: a) Export-Import (EXIM) Policy
Explanation: The Export-Import (EXIM) Policy was introduced in India as a part of the economic reforms in 1991 to promote exports.
Q8. Which of the following financial sector reforms were introduced in India under the New Economic Policy (NEP) in 1991?
a) Change in the Monopolies and Restrictive Trade Practices (MRTP) Act
b) Freedom for importing of capital goods
c) Reduction in the Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR)
d) All of the above
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Correct Answer: d) All of the above
Explanation: All the mentioned financial sector reforms were introduced in India under the New Economic Policy (NEP) in 1991.
Q9. Which of the following industries was reserved exclusively for the public sector after the economic reforms of 1991?
a) Railways
b) Metro transport
c) Communication
d) None of the above
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Correct Answer: a) Railways
Explanation: Railways was reserved exclusively for the public sector after the economic reforms of 1991.
Q10. What was the main reason behind the introduction of economic reforms in India in 1991?
a) To promote industrialization
b) To address the financial crisis and promote economic growth
c) To reduce income inequality
d) To improve the balance of payments
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Correct Answer: b) To address the financial crisis and promote economic growth
Explanation: The main reason behind the introduction of economic reforms in India in 1991 was to address the financial crisis and promote economic growth.
Q11. Which of the following is a major outcome of the economic reforms in India?
a) Increase in GDP growth rate
b) Decrease in poverty
c) Increase in employment opportunities
d) All of the above
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Correct Answer: d) All of the above
Explanation: The economic reforms in India have led to an increase in GDP growth rate, decrease in poverty, and increase in employment opportunities.
Q12. Which of the following is a criticism of the economic reforms introduced in India in 1991?
a) Increase in income inequality
b) Decrease in foreign direct investment
c) Decrease in GDP growth rate
d) Increase in fiscal deficit
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Correct Answer: a) Increase in income inequality
Explanation: One of the criticisms of the economic reforms introduced in India in 1991 is the increase in income inequality.
Q13. Which of the following sectors has seen significant growth due to the economic reforms in India?
a) Agriculture
b) Manufacturing
c) Services
d) All of the above
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Correct Answer: c) Services
Explanation: The services sector has seen significant growth due to the economic reforms in India.
Q14. Which of the following is a key feature of the economic reforms introduced in India in 1991?
a) Deregulation of industries
b) Increase in government control over the economy
c) Increase in import tariffs
d) Decrease in foreign direct investment
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Correct Answer: a) Deregulation of industries
Explanation: Deregulation of industries is a key feature of the economic reforms introduced in India in 1991.
Q15. Which of the following is an example of liberalization in the Indian economy?
a) Abolition of industrial licensing
b) Nationalization of banks
c) Increase in import tariffs
d) Increase in government control over the economy
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Correct Answer: a) Abolition of industrial licensing
Explanation: Abolition of industrial licensing is an example of liberalization in the Indian economy.
Q16. Which of the following is an example of privatization in the Indian economy?
a) Disinvestment of public sector enterprises
b) Nationalization of banks
c) Increase in import tariffs
d) Increase in government control over the economy
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Correct Answer: a) Disinvestment of public sector enterprises
Explanation: Disinvestment of public sector enterprises is an example of privatization in the Indian economy.
Q17. Which of the following is an example of globalization in the Indian economy?
a) Increase in foreign direct investment
b) Nationalization of banks
c) Increase in import tariffs
d) Increase in government control over the economy
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Correct Answer: a) Increase in foreign direct investment
Explanation: Increase in foreign direct investment is an example of globalization in the Indian economy.
Q18. Which of the following is a major challenge faced by the Indian economy after the economic reforms?
a) High fiscal deficit
b) High inflation
c) High unemployment
d) All of the above
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Correct Answer: d) All of the above
Explanation: High fiscal deficit, high inflation, and high unemployment are major challenges faced by the Indian economy after the economic reforms.
Q19. Which of the following is a major achievement of the economic reforms in India?
a) Increase in GDP growth rate
b) Decrease in poverty
c) Increase in employment opportunities
d) All of the above
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Correct Answer: d) All of the above
Explanation: The economic reforms in India have led to an increase in GDP growth rate, decrease in poverty, and increase in employment opportunities.
Q20. Which of the following is a major criticism of the economic reforms in India?
a) Increase in income inequality
b) Decrease in foreign direct investment
c) Decrease in GDP growth rate
d) Increase in fiscal deficit
Show Answer
Correct Answer: a) Increase in income inequality
Explanation: One of the criticisms of the economic reforms in India is the increase in income inequality.