Economic Reforms Since 1991 test - 2

The economic reforms, popularly known as the NEP (New Economic Policy) of 1991 were intended to take the Indian economy in the direction of Liberalisation, Privatisation and Globalisation (LPG) by removing the restrictions on trade, private sector and reduce the role of government in many areas.

The Monopolistic and Restrictive Trade Practices (MRTP) act, which was enacted in 1969 with the aim of preventing the growth of monopolies and prohibit unfair trade practices, was removed under the NEP1991.

During the economic crisis, no country or financial lender was willing to lend to India. So, India approached the International Bank for Reconstruction and Development(IBRD), popularly known as the World Bank and the International Monetary Fund (IMF) and received $7 billion as loan to manage the crisis.

WTO is expected to establish a rule based trading regime in which nations cannot place arbitrary restrictions on trade. It facilitates international trade through removal of tariff and non tariff barriers.

Liberalisation abolished industrial licensing under which every entrepreneur had to get permission from government officials to start a firm, close a firm or to decide the amount of goods that could be produced.

The NEP in 1991 was initiated by the then Union finance minister Dr. Manmohan Singh.

Full employment is the condition in which all who are able and willing to work are employed.

Foreign Exchange Reserves refer to the stock of foreign currencies held by the central bank of the country.

When expenditure is more than income, the excess is known as deficit.

Globalisation is the integration of the domestic economy with the rest of the world through trade and capital (investment) flows.