Class 12 Economics Important Chapter 12 Economic Reforms Since 1991

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Class 12 Economics Important Chapter 12 Economic Reforms Since 1991

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Economic Reforms Since 1991

Chapter: 12

PART – B: INDIAN ECONOMIC DEVELOPMENT

IMPORTANT QUESTION AND ANSWER

Short Questions and Answers:

1. What is the meaning of economic reforms in India?

Ans: Economic reforms refer to the changes in policies since 1991 aimed at improving the efficiency, productivity, and competitiveness of the economy through liberalization, privatization, and globalization.

2. Who is regarded as the Father of Indian Economic Reforms?

Ans: Narasimha Rao, the Prime Minister of India, is regarded as the Father of Indian Economic Reforms.

3. Which policy did the Indian government adopt in 1991 to improve the economy?

Ans: The government adopted the LPG (Liberalization, Privatization, and Globalization) Model of growth in 1991.

4. What was the foreign exchange crisis in India in 1991?

Ans: In 1991, India’s foreign exchange reserves were critically low, leading to a balance of payments crisis, which forced the government to seek a loan from the IMF and initiate economic reforms.

5. Which minister played a significant role in implementing economic reforms in India in 1991?

Ans: Manmohan Singh, the Finance Minister under the Narasimha Rao government, played a significant role in implementing the economic reforms.

6. What does the term ‘License Raj’ refer to in the Indian economy?

Ans: The ‘License Raj’ refers to the system of licenses, controls, and regulations used by the government to manage industrial production and business activities before the 1991 economic reforms.

7. What was the fiscal deficit in India in 1991?

Ans: The fiscal deficit in India was 8.4% of GDP in 1991.

8. What does liberalization mean in the context of India’s economic reforms?

Ans: Liberalization means reducing government restrictions, allowing greater freedom for businesses and industries, and facilitating the market forces of supply and demand.

9. What is the primary objective of privatization?

Ans: The primary objective of privatization is to reduce the involvement of the public sector in economic activities and to encourage private sector participation.

10. What is globalization?

Ans: Globalization refers to integrating the Indian economy with the global economy, promoting international trade, and encouraging the movement of goods, capital, and labor.

11. What was the goal of India’s foreign exchange reforms in 1991?

Ans: The goal was to address the balance of payments crisis and stabilize the foreign exchange market by devaluing the rupee and allowing market forces to determine the exchange rate.

12. What is the impact of economic reforms on Indian industry?

Ans: Economic reforms led to greater competition, privatization of public sector enterprises, and the emergence of new industries in India, boosting industrial growth.

13. What are the components of the New Economic Policy (NEP)?

Ans: The components of the NEP include liberalization, privatization, and globalization.

14. What is the significance of disinvestment in India’s economic reforms?

Ans: Disinvestment involves selling government stakes in public sector enterprises to reduce the financial burden on the government and improve efficiency.

15. What was the primary objective behind the introduction of the Goods and Services Tax (GST) in India?

Ans: The primary objective of GST was to simplify the tax structure, eliminate multiple taxes, and create a unified national market.