CSEET · Economic and Business Environment · Indian Economy
Which pair correctly describes a measure under 'globalisation' as part of the 1991 reforms and its purpose?
Cutting import tariffs and moving to a market-determined exchange rate are globalisation measures, since they open the economy to foreign trade and capital. Disinvestment belongs to privatisation and relaxing MRTP asset limits belongs to domestic liberalisation, so those options do not fit.
- AReduction of import tariffs and move to a market-determined exchange rate, to integrate India with the world economyCorrect
- BIncrease in import quotas and a fixed rate, to protect domestic firms
- CSale of government shares in public enterprises, to raise private ownership
- DRemoval of the MRTP limits on asset size, to ease domestic entry
Explanation
Globalisation measures concern external sector opening: lower tariffs, removal of quantitative restrictions, rupee devaluation and movement toward market-determined exchange rate, and easier foreign investment. Disinvestment is privatisation, and MRTP relaxation is liberalisation. Higher quotas and fixed rates run opposite to reform.
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