Financial Awareness - Risk, Stability & Emerging Finance
Which of the following was a major trigger for India to adopt the LPG reforms in 1991?
Which of the following was a major trigger for India to adopt the LPG reforms in 1991?
medium Q14 of 15
Step-by-Step Solution
Step 1: Identify the trigger
The question asks about the main reason behind the adoption of LPG reforms in 1991.Step 2: Analyze historical context
India faced a severe Balance of Payments crisis with foreign exchange reserves nearly depleted, prompting reforms.Final Answer:
Balance of Payments crisis and foreign exchange shortage → Option AQuick Check:
LPG reforms trigger = Balance of Payments crisis ✅
Quick Trick: Remember 1991 crisis was Balance of Payments
Common Mistakes:
- Confusing inflation or FDI as the trigger
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