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Question
India’s post-1990 economic strategy entailed three important breaks with the past:
- To dismantle the vast network of controls and permits that dominated the economic system.
- To redefine the role of the state as a facilitator of economic transactions and as a neutral regulator rather than the primary provider of goods and services.
- To move away from a regime of import substitution and to integrate fully with the global trading system.
The 1991 reforms unleashed the energies of Indian entrepreneurs and gave untold choices to the consumers and changed the face of the Indian economy. The reform agenda constituted a paradigm shift and has defined the broad contours of economic policymaking for three decades.
Liberalization was adopted as the guiding principle of governance and all governments since 1991, have broadly stuck to that path.
Today we don’t need a paradigm shift. We need to look at individual sectors and see which one of these needs, reforms to create a competitive environment and improve efficiency. The power sector, the financial system, governance structures, and even agricultural marketing need reforms.
Today’s reforms also require much more discussion and consensus-building. The central government needs to work in tandem with state governments and consult different stakeholders impacted by reform decisions. Timing and sequencing are critically important in the new reforms’ agenda.
- In the light of the given text and common knowledge, identify the incorrect statement -
Options
A severe balance of payments problem triggered an acute economic crisis in 1991.
In 1991, the economic and political leadership launched a multipronged reforms agenda to repair the macroeconomic situation of the nation.
In the post-1991 situation, the state was given the role of primary regulator of the economy.
Post pandemic, individual sectors should be looked at closely. Sectors that need reforms should be identified and corrective action should be taken.
Solution
In the post-1991 situation, the state was given the role of primary regulator of the economy.
