2000 General Studies, all questions
UPSC Prelims 2000 · General Studies
Question 17: Economy and Social Development
Economic liberalisation in India started with
asubstantial changes in industrial licensing policy
bthe convertibility of Indian rupee
cdoing away with procedural formalities for foreign direct investment
dsignificant reduction in tax rates
AnswerThe answer is (a).
Economic liberalisation in India began with the New Industrial Policy of July 1991, which scrapped industrial licensing for all but a short list of industries, shrank the list reserved for the public sector and eased restrictions on large firms. Rupee convertibility came in stages, with current account convertibility only in 1994. FDI approvals and tax rates were eased alongside.
Why each option is right or wrong
- (a) Right: the 1991 changes in industrial licensing started liberalisation.
- (b) Rupee convertibility came in stages later; current account convertibility came in 1994.
- (c) Easier FDI procedures were part of the package, not its starting point.
- (d) Tax rate cuts followed later through the 1990s tax reforms.
Explanation: written by UPSC Grade, not by UPSC.
Source: UPSC, Civil Services (Preliminary) Examination 2000, General Studies. UPSC's own paper isn't online; the words are from a published compilation. The paper on upsc.gov.in.