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Economy
2017
Basic Economic Terms
FDI and FII
External Sector
Economic Reforms

Which of the following has/have occurred in India after its liberalization of economic policies in 1991?

  1. Share of agriculture in GDP increased enormously.
  2. Share of India’s exports in world trade increased.
  3. FDI inflows increased.
  4. India’s foreign exchange reserves increased enormously.

Share of agriculture in GDP increased enormously.

Share of India’s exports in world trade increased.

FDI inflows increased.

India’s foreign exchange reserves increased enormously.

Select the correct answer using the codes given below :

B.2, 3 and 4 only
C.2 and 3 only
D.1,2, 3 and 4
A.1 and 4 only

Correct Answer: Option B

After the economic liberalization of 1991 in India:

  • The share of agriculture in GDP decreased, not increased. The service sector's contribution increased significantly.

  • India's exports in world trade increased due to greater integration with the global economy.

  • FDI inflows increased substantially as India became a more attractive destination for foreign investment.

  • India's foreign exchange reserves increased enormously due to increased exports and FDI inflows.

Statement 1 is incorrect. Statements 2, 3, and 4 are correct. Hence, option B is the correct answer.

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