Question

The signs of crisis which created the need for Economic Reforms in 1991 were ________________.

• A. Low Forex Reserves
• B. Huge National Debt
• C. Inflation
• D. All of the above

Answer 1

Answer: (D)

All of the above

The signs of crisis which created the need for Economic Reforms in 1991 were:

a) Low Forex Reserves

b) Huge National Debt

c) InflationDuring 1991, Indian Government adopted New Economic Policy which emphasized liberalization, privatization and globalization. During 1991, the economic crisis arose due to many economic problems as the government was facing high fiscal deficit due to rising current account deficit which acted as two spiral rate which lead to heavy inflation in the economy.