CA Foundation · Business Economics · Indian Economy
Which of the following measures is part of the 'globalisation' component of the 1991 reforms?
Rupee devaluation and the move to current account convertibility belong to globalisation because they integrate India's economy with world trade and capital flows. Disinvestment is privatisation, while relaxing the MRTP limit and reducing public sector reservation are domestic liberalisation measures.
- ADisinvestment of shares of public sector enterprises
- BRemoval of the MRTP Act limit on asset size for firms
- CDevaluation of the rupee and move towards current account convertibilityCorrect
- DReduction of the number of industries reserved for the public sector
Explanation
Globalisation measures relate to external sector integration: rupee devaluation in 1991, reduced tariffs, removal of import licensing and convertibility on the current account. Disinvestment is privatisation, while the MRTP relaxation and de-reservation are liberalisation of domestic industry.
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