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Question

Which of the following has/have occurred in India after its liberalization of economic policies in 1991?

1. Share of agriculture in GDP increased enormously.
2. Share of India's exports in world trade increased.
3. FDI inflows increased.
4. India's foreign exchange reserves increased enormously.

Select the correct answer using the codes given below:
(a) 1 and 4 only
(b) 2, 3 and 4 only
(c) 2 and 3 only
(d) 1, 2, 3 and 4

Answer:

B

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Explanation:

Statement 1 is incorrect. The share of agriculture in GDP did not increase enormously after India's liberalization of economic policies in 1991. In fact, the share of agriculture in GDP has been declining over the years as the focus shifted towards the industrial and services sectors.

Statement 2 is correct. The share of India's exports in world trade did increase after the liberalization of economic policies. The opening up of the economy and the removal of trade barriers allowed Indian goods and services to access global markets more easily.

Statement 3 is correct. Foreign Direct Investment (FDI) inflows did increase significantly after the liberalization of economic policies. The relaxation of investment regulations and the opening up of sectors for foreign investment attracted a higher inflow of FDI into India.

Statement 4 is correct. India's foreign exchange reserves did increase after the liberalization of economic policies. The growth in exports, FDI, and other sources contributed to the accumulation of foreign exchange reserves.

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