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India transitioned from a socialist-influenced mixed economy model post-1991 through economic liberalisation. Which of the following best describes the primary objective of this transition?

India's 1991 economic liberalisation shifted from a state-controlled mixed economy to a market-oriented one. The key objective was promoting competition, reducing bureaucratic controls (the License Raj), and integrating India into the global economy through FDI and trade.

  1. ATo eliminate private sector participation and strengthen state monopolies
  2. BTo promote market-driven mechanisms, reduce state control, and attract foreign investmentCorrect
  3. CTo abandon all government intervention in economic activities
  4. DTo restrict foreign direct investment while strengthening domestic industries only

Explanation

The 1991 economic reforms aimed to liberalise the economy by reducing the License Raj, opening markets to competition, and attracting global capital and technology. The reforms did not eliminate government intervention (ruling out option 2) but rather restructured it. Complete closure to FDI (option 3) contradicts the reform's core objective of globalisation.

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