Question

Which of the following statements correlate to the economic situation of India prior to the economic reform of 1991?

• A. Domination of public sector enterprises
• B. Inflow of private investment
• C. Existence of fixed exchange rate
• D. Trade surplus for a decade

Answer 1

Answer: (A), (C)

Existence of fixed exchange rate

Prior to the economic reform of 1991, Indian economy was dominated by the public sector enterprises. Private investment was very less. In case of trade, India's import was more than export and hence, there was trade deficit. In case of currency exchange regime, India had a fixed exchange rate.