liberalization of economic policies in 1991

77) Which of the following has/have occurred in India after its liberalization of economic policies in 1991?

1. Share of agriculture in GDP increased enormously.
2. Share of India’s exports in world trade increased.
3. FDI inflows increased.
4. India’s foreign exchange reserves increased enormously.

Select the correct answer using the codes given below :

(a) 1 and 4 only

(b) 2, 3 and 4 only

(c) 2 and 3 only

(d) 1, 2, 3 and 4

Solution: (b) 2, 3 and 4 only

 Share of agriculture in GDP has reduced post-1991.

Statement 2, 3 and 4: These happened on account of liberalization of the current as well capital account.  Due to globalization exports have picked up due to increased completion and productivity.

Also, FDI inflows have increased due to liberalization. From the time when India could have defaulted BoP in 1991, we have reached a situation today where forex reserves are over $350 billion!