CMA Foundation · Fundamentals of Business Economics and Management · Economic and Business Environment
India's 1991 economic reforms are commonly summarised by three policy directions. Which set correctly names them?
The 1991 reforms are summarised as Liberalisation, Privatisation and Globalisation (LPG). They reduced licensing and controls, lessened the public sector's dominance and opened India to global trade and investment, replacing the earlier regulated, protection-oriented development model.
- ALiberalisation, Privatisation, GlobalisationCorrect
- BNationalisation, Protection, Planning
- CCentralisation, Subsidisation, Regulation
- DCollectivisation, Licensing, Import substitution
Explanation
The New Economic Policy of 1991 is known by the LPG label: Liberalisation (removing licences and controls), Privatisation (reducing the state's role in enterprises) and Globalisation (integrating with the world economy). The other sets describe the earlier inward-looking, controlled model.
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