Financial Awareness - Risk, Stability & Emerging Finance
Which of the following was a direct consequence of the 1991 Economic Reforms in India?
Which of the following was a direct consequence of the 1991 Economic Reforms in India?
medium Q5 of 15
Step-by-Step Solution
Step 1: Recall the objectives of the 1991 reforms
The reforms aimed to liberalize the economy, reduce controls, and attract foreign capital.Step 2: Analyze each option
GST was introduced much later in 2017; bank nationalization occurred before 1991; banning foreign investors contradicts globalization.Step 3: Identify the direct outcome
Liberalization and easing of regulations led to a significant increase in foreign direct investment inflows.Final Answer:
Increase in foreign direct investment inflows → Option CQuick Check:
1991 reforms impact = Higher FDI inflows ✅
Quick Trick: Liberalization after 1991 directly boosted FDI inflows.
Common Mistakes:
- Confusing later reforms like GST or SEZ Act with immediate 1991 outcomes.
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