Question

“Trade and Investment Policy of India had undergone comprehensive changes in the post reforms period of 1991.” Do you agree with the given statement? Justify your answer with any two valid arguments.

Hint:

The 1991 reforms introduced LPG policies, opening India’s economy to competition and private sector growth.

Answer 1

Yes, the Indian policy underwent significant changes after the 1991 economic reforms, which aimed at liberalization, privatization, and globalization (LPG reforms). Two Key Arguments:
1. Liberalization of the Economy:
- The government removed industrial licensing, reduced import restrictions, and encouraged private sector participation.
- This promoted foreign investment, increased competition, and accelerated economic growth. 2. Privatization of Public Sector Enterprises (PSEs):
- The government disinvested in many PSUs and encouraged private sector efficiency.
- This reduced the burden on the government and improved productivity and competitiveness in industries. Conclusion: The 1991 economic reforms marked a shift from a controlled economy to a market-driven economy, fostering growth, investment, and global integration.