UPSC Indian Economy – Chapter 23: Economic Reforms since 1991 (24 MCQs)
UPSC Indian Economy – Chapter 23: Economic Reforms since 1991 (24 MCQs) – 24 questions, subject: Indian Economy. Every question has the correct answer with a one-line explanation; tap "Show Answer". Free practice for TNPSC, UPSC, SSC, Bank and RRB exams – Shanmugam IAS Academy, Coimbatore.
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In 1991, automatic approval of foreign direct investment in high-priority industries was allowed up to:
Correct Answer: A [51 per cent]
Explanation:
The Statement on Industrial Policy (24 July 1991) allowed automatic approval of foreign equity up to 51 per cent in priority industries.
Which of the following was NOT a cause of the 1991 balance-of-payments crisis?
Correct Answer: D [A large current account surplus]
Explanation:
India had a deficit.
The industries now reserved exclusively for the public sector are:
Correct Answer: C [atomic energy and railway operations]
Explanation:
After the 1991 cuts and later dereservation, only atomic energy and railway operations remain reserved for the public sector.
Which of the following still requires a compulsory industrial licence?
Correct Answer: C [Industrial explosives]
Explanation:
Industrial explosives are among the five industries still under compulsory licensing, with alcohol, tobacco products, defence electronics and hazardous chemicals.
The MRTP Act was replaced by the:
Correct Answer: D [Competition Act, 2002]
Explanation:
The Competition Act, 2002 replaced the MRTP Act, shifting the focus from curbing firm size to preventing anti-competitive conduct.
Under the New Industrial Policy of 1991, the number of industries reserved for the public sector was reduced from 17 to:
Correct Answer: B [8]
Explanation:
the 1991 Statement cut public-sector reservation from the 17 industries of the 1956 Schedule A to 8.
Consider the following statements:
1. The Jan Vishwas Act, 2023 decriminalised 183 provisions in 42 Acts.
2. The Jan Vishwas (Amendment of Provisions) Act, 2026 amends 784 provisions in 79 Acts.
3. The Jan Vishwas (Amendment of Provisions) Bill, 2026 was rejected by the Rajya Sabha.
Which of the statements given above are correct?
Correct Answer: C [1 and 2 only]
Explanation:
The 2023 Act decriminalised 183 provisions in 42 Acts, and the 2026 Act amends 784 provisions in 79 Central Acts.
The Digital India Land Records Modernisation Programme is funded:
Correct Answer: D [100 per cent by the Centre]
Explanation:
Central Sector Scheme.
The three farm laws of 2020 were:
Correct Answer: B [repealed in 2021]
Explanation:
Parliament repealed the three farm laws of 2020 in 2021 after prolonged farmer protests.
GST, the Insolvency and Bankruptcy Code and inflation targeting are usually classified as:
Correct Answer: B [second-generation reforms]
Explanation:
These 2016–17 reforms of taxes, insolvency and monetary policy deepened the 1991 agenda and are classed as second-generation reforms.
Assertion (A): Factor-market reforms such as labour and land reforms have moved more slowly than goods-market reforms.
Reason (R): Labour and land are in the Concurrent and State Lists, so reform needs agreement with the States.
Correct Answer: A [Both A and R are true, and R is the correct explanation of A]
Explanation:
Labour is on the Concurrent List and land on the State List, so factor-market reform needs State consent and moves slowly.
The committee that recommended opening insurance to private players (1994) was headed by:
Correct Answer: C [R. N. Malhotra]
Explanation:
The R. N. Malhotra Committee (1994) recommended opening insurance to private players and setting up an independent regulator.
The Raja J. Chelliah Committee (1991–93) dealt with:
Correct Answer: B [tax reform]
Explanation:
The Raja J. Chelliah Tax Reforms Committee recommended lower rates, a wider base and a VAT-type indirect tax.
Which of the following occurred after the 1991 reforms?
1. Forex reserves rose sharply.
2. The share of agriculture in GDP rose.
3. FDI inflows rose.
Select the correct answer:
Correct Answer: D [1 and 3 only]
Explanation:
Forex reserves and FDI inflows rose sharply after 1991, while agriculture's share in GDP fell, so only 1 and 3 are correct.
Arrange the following in chronological order:
1. FRBM Act
2. GST introduced
3. FEMA in force
4. Market-determined exchange rate
Select the correct answer:
Correct Answer: C [4-3-1-2]
Explanation:
1993, 2000, 2003, 2017.
"A hundred small steps" (2008) was the report of the committee on financial sector reforms headed by:
Correct Answer: A [Raghuram Rajan]
Explanation:
The Raghuram Rajan Committee on Financial Sector Reforms titled its 2008 report "A Hundred Small Steps".
The Financial Sector Legislative Reforms Commission (2013) was chaired by:
Correct Answer: B [B. N. Srikrishna]
Explanation:
Justice B. N. Srikrishna chaired the FSLRC, which reported in 2013 on rewriting India's financial-sector laws.
Which of the following describes Vietnam correctly?
Correct Answer: D [Its growth is linked to integration with global supply chains and exports.]
Explanation:
Vietnam's fast growth rests on integration with global supply chains, export-oriented manufacturing and long-standing low labour costs.
India's merchandise exports in 2025-26 were about:
Correct Answer: A [US$ 442 billion]
Explanation:
US$ 441.78 billion.
The Narasimham Committee of 1991 dealt mainly with:
Correct Answer: B [reform of the financial and banking system]
Explanation:
The first Narasimham Committee (1991) examined the financial system and recommended lower SLR and CRR, freer interest rates and prudential norms.
With reference to the Digital India Land Records Modernisation Programme, consider the following statements:
1. To implement the scheme, the Central Government provides 100% funding.
2. Under the Scheme, Cadastral Maps are digitised.
3. An initiative has been undertaken to transliterate the Records of Rights from local language to any of the languages recognized by the Constitution of India.
Which of the statements given above are correct?
Correct Answer: D [1, 2 and 3]
Explanation:
DILRMP is fully centrally funded, digitises cadastral maps and transliterates Records of Rights into Constitution-recognised languages, so all three are correct.
Consider the following statements:
1. Vietnam has been one of the fastest growing economies in the world in the recent years.
2. Vietnam is led by a multi-party political system.
3. Vietnam's economic growth is linked to its integration with global supply chains and focus on exports.
4. For a long time Vietnam's low labour costs and stable exchange rates have attracted global manufacturers.
5. Vietnam has the most productive e-service sector in the Indo-Pacific region.
Which of the statements given above are correct?
Correct Answer: C [1, 3 and 4]
Explanation:
Vietnam is a fast-growing, export-led economy tied to global supply chains, long attractive for low labour costs and stable exchange rates.
With reference to land reforms in independent India, which one of the following statements is correct?
Correct Answer: B [The major aim of land reforms was providing agricultural land to all the landless.]
Explanation:
The central aim of land reforms was giving agricultural land to the landless by abolishing intermediaries, imposing ceilings and protecting tenants.
Which of the following 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.
Select the correct answer using the codes given below:
Correct Answer: B [2, 3 and 4 only]
Explanation:
After 1991 India's share of world exports, FDI inflows and forex reserves all rose, while agriculture's share in GDP fell.
➤ Full notes, maps, tables, a reason for every option and Mains PYQs – U15 · Indian Economy (UPSC book, ₹249): www.shanmugamiasacademy.in/study-materials/upsc-indian-economy
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