1.

What was the amount that India borrowed in the 1980s from the IMF, International
Monetary Fund?

1.

A. 7 billion

B. 10 billion

C. 12 billion

D. 5 billion

Answer: A
2. At the peak of 1990 India had foreign reserves for how many weeks of import?

1.

A. 3 weeks

B. 1 week

C. 2 weeks

D. 4 weeks

Answer: A
3. Who was India’s prime minister during 1990 when the economic crisis was unfolding?

1.

A. Narendra Modi

B. Manmohan Singh

C. Atal Bihari Vajpayee

D. Chandra Shekhar

Answer: D
4. What is called the twin deficits of 1990?

1.

A. Gold reserves and foreign exchanges

 B. Imports and exports

C. Devaluation of rupee and inflation

D. Deficit in trade balance and fiscal deficit

Answer: D
5. What did the Indian government do to get a loan from the IMF?

1.

A. Gave government bonds as collateral

B. Gave India’s gold reserves as collateral

C. Made business deals with other countries

D. Followed protectionism of the domestic market

Answer: B
6. What led the way to liberalization in India?

1.

A. Fall of the Soviet Union

B. The economic crisis and deficits

C. The war between India and Pakistan

D. Gulf War

Answer: B
7. What were the main causes of the depreciation of the Indian currency in 1990?

1.

A. Privatisation of the Indian market

B. India’s foreign policy relations with the Soviet Union

C. Deficits, the overvaluation of the rupee and investor confidence

D. Starting of the Gulf war in the middle east

Answer: C
8. What was India’s gross fiscal deceit in 1990?
 1.

A. 15% of Indian GDP

B. 18% of Indian GDP

C. 12.7% of Indian GDP

D. 10.4% of Indian GDP

Answer: C
9. How did the Reserve Bank of India handle the depreciation of the Indian currency
during the 1990-1991 period?

1.

A. Sold India’s gold reserves

B. Introduced Market reforms

C. Invented foreign countries for investments

D. Expanded international reserves and slowed the decline in value

Answer: D
10. What was India’s foreign exchange reserve value in January 1991?

1.

A. 7 billion dollars

B. 6 billion dollars

C. 3 billion dollars

D. 1.2 billion dollars

Answer: D
11. Under whose prime minister’s ship did the government bring about liberalisation in
Indian media?

1.

A. Chandra Shekar

B. Manmohan Singh

C. C.P.V Narsimha Rao

 D. Atal Bihari Vajpayee

Answer: C
12. To which two banks did India airlift gold as collateral for a loan?

1.

A. Bank of England and Union Bank of Switzerland

B. Union bank of Switzerland and Asian Development Bank

C. Asian Development Bank and Bank of England

D. Citi Bank and Royal Bank of Scotland

Answer: A
13. Who was India’s Finance minister during Economic reforms of 1991?

1.

A. Manmohan Singh

B. Arun Jaitley

C. P.Chidambaram

D. Nirmala Sithraman

Answer: A
14. Structural reforms and stabilization measures come under which policy branch?

1.

A. Industrial policy

B. Monetary regulations

C. New Economic policy

D. Financial Policy

Answer: C
15. Which organization is responsible for regulating the financial sector in India?

1.

A. A.RBI
 B. B.NSE

C. C.SBE

D. Ministry of Finance

Answer: A
16. After the finance sector reforms there was a limit on foreign financial investment.
What was the percentage of the limit?

1.

A. 80%

B. 70%

C. 50%

D. 74%

Answer: D
17. Which of the following organizations is a Navratna?

1.

A. National Aluminium Company [NALCO]

B. BSNL

C. Air India

D. Indian Oil Corporation

Answer: A
18. What is the policy that works on integrating the the country’s economy and global
economy

1.

A. Liberalisation

B. Privatisation

C. Globalisation

D. Protectionism

Answer: C
 19. What is the name of the organisation that is the predecessor of the World Trade
Organization?

1.

A. International Monetary Fund

B. World Bank

C. General Agreement on Trade and Tariff

D. United Nations

Answer: C
20. What is another name for the World Bank?

1.

A. Asian Development Bank

B. International Bank of Reconstruction and Development

C. Swiss Bank of Development

D. Union Development Bank

Answer: B
21. When were Economic reforms introduced in India?

1.

A. 1985

B. 1995

C. 1990

D. 1991

Answer: D
22. What was the issue that was being addressed through the Economic reforms of 1991?

1.

A. Depreciation of the Indian rupee

B. Crisis in Foreign exchange

 C. Economic policy failure

D. All of these

Answer: B
23. Who initiated the New Economic Policy in 1991?

1.

A. Prime Minster

B. Education Minister

C. Finance Minister

D. Foreign Minister

Answer: C
24. What was the objective of the New Economic Policy 1991?

1.

A. Structural transformation

B. Reorganizing Public Administration

C. Economic reforms

D. Management of Foreign trade

Answer: C
25. Which was one of the acts that got quashed after the introduction of NEP in 1991?

1.

A. FCRA

B. MRTP

C. POSH

D. MDVP

Answer: B
26. What is the name of the book written by M V Visvesvaraya on the economy of India?

1.
 A. Indian Economy: challenges and success

B. Planned Economy for India

C. India’s Economic Challenges

D. Economic reconstruction

Answer: B
27. Who is referred to as the father of India ‘s economic reforms?

1.

A. A.P.V Narasimha Rao

B. Manmohan Singh

C. Chandra Shekar

D. Narendra Modi

Answer: A
28. What were the main reforms introduced by P.V Narasimha Rao?

1.

A. Liberalisation, Globalization and Privatisation

B. Structural reforms

C. Economic reconstruction

D. Foreign policy improvements

Answer: A
29. When a country’s economy becomes globalized, which of the following things
happen?

1.

A. Liberalisation

B. Trade policies

C. Out sourcing

D. None of these
Answer: C
30. Of the following sectors which remained a public sector even after the reforms of
1991?

1.

A. Communication

B. Banking

C. Construction

D. Railways

Answer: D

Economic reforms since 1991 MCQs Class

12 (Multiple choice Questions)
1. What was the amount received by India as a loan from the International
Monetary Fund (IMF) in 1980s?
a) $ 6 billion
b) $ 6.5 billion
c) $ 7 billion
d) $ 8 billion

Answer
Answer: India received $ 7 billion as a loan from IMF to overcome its crisis in the
balance of payment account. Therefore, c is the correct option.

2. Stabilization measures and Structural reform measures are the two groups of
which policy ?
a) New Industrial Policy
b) New Economic Policy
c) Trade Policy
d) Monetary Policy
Answer
Answer: New Economic Policy can be divided into two groups, Stabilization
measures and Structural reform measures. Thus, the correct option is b.

3. How many industries were reserved for the public sector at the time of
deregulation of Industrial sector in 1991 ?
a) 17
b) 18
c) 19
d) 20

Answer
Answer: The correct option is a, because 17 industries were reserved for public
sector,Which reduced to 8 under New Industrial Policy.

4. Which institution regulates the financial sector in India ?

a) SEBI
b) NABARD
c) SBI
d) RBI

Answer
Answer: RBI is the central bank of India and the whole financial sector is
regulated by it. So, d is the correct option.
5. What was the percentage of foreign investment limits in banks following the
financial sector reforms?
a) 74
b) 70
c) 85
d) 60

Answer
Answer: a is the correct option. The percentage of foreign investment limits in
banks following the financial sector reforms was raised to 74.

6. What is the name of the tax introduced by Indian Parliament in 2016 to unify
the indirect tax system in India?
a) Sales tax
b) Value-added tax
c) Goods and Services tax
d) Custom duty

Answer
Answer: Indian Government introduced the Goods and Services tax in 2016 with
the aim to establish a unified tax system. Thus, c is the correct option.

7. Which of the following is a Navaratna ?

a) Indian Oil Corporation Limited
b) Steel Authority of India Limited
c) Hindustan Aeronautics Limited
d) Airport Authority of India

Answer
Answer: Option c is correct because Hindustan Aeronautics Limited is a
Navaratna.
8. Which policy involves integrating Domestic economy with the World
economy ?
a) Globalization
b) Privatisation
c) Liberalisation
d) None of the above

Answer
Answer: Globalization aims at increasing the integration and interdependence
among countries. Therefore, a is the correct option.

9. Name the successor organization of General Agreement on Trade and Tariff

(GATT) ?
a) World Bank
b) International Monetary Fund (IMF)
c) Food and Agricultural Organization (FAO)
d) World Trade Organisation (WTO)

Answer
Answer: WTO succeeded GATT in 1995. So, the correct option is d.

10. Following the New Economic Policy, which sector mainly drives the growth of
Indian economy?
a) Agriculture
b) Service
c) Industry
d) Construction

Answer
Answer: After the New Economic Policy, the growth of Indian economy is mainly
driven by the service sector. So, b is the correct option.

Economic reforms since 1991 MCQ Class 12

11. Consider the following statements with regard to External Sector Reforms
and mark the correct combination.
I) It falls under the category of Liberalisation
II) Liberation of trade policy was a major reform undertaken
III) Devaluation of Indian rupee was another major reform
a) Only I
b) Only I and II
c) All of the above
d) None of the above

Answer
Answer: the correct option is c; reference point D under liberalisation as a part of
reforms since 1991.

12. The process through which a company hires services from external sources,
mainly foreign countries is known as ?
a) Incoming
b) Outsourcing
c) Deregulation
d) Devaluation

Answer
Answer: the correct option is b, the process through which a company hires
improved services from external sources is known as outsourcing.

13. IBRD was another name for which of the following institution ?
a) Reserve Bank of India
b) Federal Reserve
c) World Bank
d) Swiss National Bank

Answer
Answer: IBRD or International Bank of Reconstruction and Development was the
other name of the World Bank, therefore, the correct option is c.

14. Consider the following statements with respect to Industrial Deregulation and
state the correct combination : –
I) Restrictions imposed by Licensing policy was removed
II) Price fixation and controls were removed
III) Private sector was not allowed to enter the public space.
a) Only I
b) I and II
c) Only III
d) I, II and III

Answer
Answer: the correct option is b, reference- point A under liberalisation.

15. Spectacular growth in the _________ sector was visible after 2000.
a) Service
b) Industry
c) Social
d) All of the above

Answer
Answer: Service

16. India approached the International Bank for Reconstruction and

Development, popularly known as _________ and the International Monetary
Fund for loans.
a) IDBI
b) World Bank
c) SBI
d) All of the above

Answer
Answer: World Bank

17. ________ measures are short term measures, intended to correct the
weaknesses of the Balance of Payment and to bring inflation under control.
a) Stabilisation
b) Structural reforms
c) Federal reforms
d) None of the above

Answer
Answer: Stabilisation
18. Many goods produced by the small-scale industries were ________ following
the deregulation of Industrial sector in 1991.
a) Reserved
b) Dereserved
c) Both A and B
d) None of the above

Answer
Answer: de-reserved

19. The financial sector in India is regulated by __________

a) RBI
b) SBI
c) IDBI
d) None of the above

Answer
Answer: RBI

20. One of the main aims of the financial sector reforms is to reduce the role of
RBI from that of a __________to a facilitator of financial sector.
a) Coordinator
b) Regulator
c) Administrator
d) None of the above

Answer
Answer: Regulator
Economic reforms since 1991 MCQ Class 12

21. Tax reforms are concerned with reforms in the Government’s __________
and ____________ Policies, which are collectively known as Fiscal policy.
a) Taxation ; Public Expenditure
b) Taxation, Non-taxation
c) Taxation, Private expenditure
d) Private Expenditure ; Taxation

Answer
Answer: a) Taxation ; Public Expenditure

22. ___________ taxes are the taxes levied on commodities.

a) Direct
b) Indirect
c) Both A and B
d) None of the above

Answer
Answer: Indirect

23. The Goods and Service Tax Act came into effect from ___________, 2017.
a) April
b) May
c) June
d) July
Answer
Answer: July

24. In 1991, as an immediate measure to resolve the balance of payment crisis,

the rupee was _______ against foreign currencies.
a) Revalued
b) Devalued
c) Appreciated
d) Depreciated

Answer
Answer: Devalued

25. _________ on imports of manufactured consumer goods and agricultural

products were fully removed from April, 2001.
a) Qualitative restrictions
b) Quantitative restrictions
c) Both A and B
d) None of the above

Answer
Answer: Quantitative restrictions

26. Financial sector includes _______.( Fill in the blank with correct alternative)
a) Banking and non banking financial institutions
b) Stock exchange market
c) Foreign exchange market
d) All of the above
Answer
Answer:(d)

27. Under 1991 reforms,the industrial licence was abolished except for ________
industries. ( Fill in the blank with correct alternative)
a) Liquor
b) Health, security and environment
c) Defence equipment.
d) All of the above

Answer
Answer:(d)

28. ________ refers to the process of transferring/involving the private sector in

the ownership, management and control of public sector enterprises. ( Fill in the
blank with correct alternative)
a) Liberalisation
b) Privatisation
c) Globalisation
d) None of the above

Answer
Answer:(b)
29. _________ is the outcome of privatisation and liberalisation.( Fill in the blank
with correct alternative)
a) Globalisation
b) Reforms
c) Fiscal policy
d) WTO

Answer
Answer:(a)

30. ________ is the outcome of globalisation. ( Fill in the blank with correct
alternative)
a) Privatisation
b) Liberalisation
c) Outsourcing
d) None of the above

Answer
Answer:(c)

Economic reforms since 1991 MCQs

31. Read the following statement given below and choose the correct alternative
Statement 1- The reforms of 1991, neglected the agricultural sector
Statement 2- Direct tax consist of taxes on income of individuals and and profits
of businesses enterprises
a) Both are correct
b) Both are incorrect
c) Statement 1 is correct and statement 2 is incorrect
d) Statement 1 is incorrect and statement 2 is correct

Answer
Answer:(a)

32. Read the following statement given below and choose the correct alternative
Statement 1- Economic reforms helped to control deflation
Statement 2- Economic reforms made India an emerging power in the world
economy
a) Both are correct
b) Both are incorrect
c) Statement 1 is correct and statement 2 is incorrect
d) Statement 1 is incorrect and statement 2 is correct

Answer
Answer:(d)

33. Read the following statement given below and choose the correct alternative
Statement 1- IMF facilitates world trade
Statement 2- WTO was founded as the successor of IMF
a) Both are correct
b) Both are incorrect
c) Statement 1 is correct and statement 2 is incorrect
d) Statement 1 is incorrect and statement 2 is correct

Answer
Answer:(b)

34. Read the following statement given below and choose the correct alternative
Statement 1- Privatisation helped in reviving sick public sector units
Statement 2- Social welfare was a concern of privatisation.
a) Both are correct
b) Both are incorrect
c) Statement 1 is correct and statement 2 is incorrect
d) Statement 1 is incorrect and statement 2 is correct

Answer
Answer:(c)

35. Read the following statement given below and choose the correct alternative
Statement 1- Government introduced fiscal reforms in order to raise non tax
revenue
Statement 2- GST stands for Goods and support tax
a) Both are correct
b) Both are incorrect
c) Statement 1 is correct and statement 2 is incorrect
d) Statement 1 is incorrect and statement 2 is correct

Answer
Answer:(c)

36. Read the following statement given below and choose the correct alternative
Statement 1- Devaluation was adopted under fiscal reforms
Statement 2- Determination of exchange value was left on free play under
reforms of 1991
a) Both are correct
b) Both are incorrect
c) Statement 1 is correct and statement 2 is incorrect
d) Statement 1 is incorrect and statement 2 is correct

Answer
Answer:(d)

37. Read the following statement given below and choose the correct alternative
Statement 1- WTO acts as a watchdog of unilateral trade
Statement 2- India is not a member of WTO
a) Both are correct
b) Both are incorrect
c) Statement 1 is correct and statement 2 is incorrect
d) Statement 1 is incorrect and statement 2 is correct

Answer
Answer:(b)

38. Choose the correctly matched pair from the following

Column A Column B

A. WTO 1. 1955

B. GATT 2. 1991

C. MRTP 3. 1969

D. Economic reforms 4. 1948

a) A-3
b) B-4
c) C-2
d) D-1

Answer
Answer:(b)

39. Choose the correctly matched pair from the following

Column A Column B

A. Globalisation 1. Hiring commercial services from rest of the world

B. Privatisation 2. Removing unnecessary controls

C. Outsourcing 3. Involving private sector in ownership

D. 4. Unification of domestic economy with economies

Liberalisation of rest of the world

a)A-2
b)B-4
c)C-1
d)D-3

Answer
Answer:(c)
40. Read the following statement given below and choose the correct alternative
Assertion (A)- The number of industries, exclusively reserved for public sector,
reduced from 17 to 3.
Reason (R ) – Amendment were made in MRTP act under industrial reforms
a)Both assertion and reason are true. Reason is the correct explanation of
assertion
b)Both assertion and reason are true. Reason is not the correct explanation of
assertion
c)Assertion is true but reason is not
d)Reason is true but assertion is not

Answer
Answer:(b)

Economic reforms since 1991 MCQ Class 12

41. Read the following statement given below and choose the correct alternative
Assertion (A)- Government introduced various reforms in 1991 called tax reforms
Reason ( R )- Government needed to reduce tax evasion and raise tax and non
tax revenue under 1991 reforms
a)Both assertion and reason are true. Reason is the correct explanation of
assertion
b)Both assertion and reason are true. Reason is not the correct explanation of
assertion
c)Assertion is true but reason is not
d)Reason ia true but Assertion is not

Answer
Answer:(a)
42. Read the following statement given below and choose the correct alternate
Assertion (A)- Privatisation encourages free play of market forces.
Reason (R )- Resistance of labour union was an obstacle to Privatisation
a)Both assertion and reason are true. Reason is the correct explanation of
assertion
b)Both assertion and reason are true. Reason is not the correct explanation of
assertion
c)Assertion is true but reason is not
d)Reason is true but assertion is not

Answer
Answer:(b)

43. Read the following statement given below and choose the correct alternative
Assertion (A)- Globalisation is associated with change in ownership of public
sector units
Reasons ( R)- Globalisation is associated with growing economic independence
a)Both assertion and reason are true. Reason is the correct explanation of
assertion
b)Both assertion and reason are true. Reason is not the correct explanation of
assertion
c)Assertion is true but reason is not
d)Reason is true but assertion is not

Answer
Answer:(d)

44. Read the following statement given below and choose the correct alternative
Assertion (A)- GATT was established in 1948
Reason ( R)- GATT was established to achieve the objective of free trade
a)Both assertion and reason are true. Reason is the correct explanation of
assertion
b)Both assertion and reason are true. Reason is not the correct explanation of
assertion
c)Assertion is true but reason is not
d)Reason is true but Assertion is not

Answer
Answer:(c)

45. Read the following statement given below and choose the correct alternative
Assertion (A)- Globalisation resulted in jobless growth in India.
Reason (R )- Ineffective policy of disinvestment is a negative effect of economic
reforms.
a)Both assertion and reason are true. Reason is the correct explanation of
assertion
b)Both assertion and reason are true. Reason is not the correct explanation of
assertion
c)Assertion is true but reason is not.
d)Reason is true but assertion is not

Answer
Answer:(d)

46. Read the following statement given below and choose the correct alternative
Assertion (A)- The navratnas were granted financial and operational autonomy in
the working of the companies
Reason ( R)- The government decided to give special treatment to some profit
making PSU
a)Both assertion and reason are true. Reason is the correct explanation of
assertion
b)Both assertion and reason are true. Reason is not the correct explanation of
assertion
c)Assertion is true but reason is not
d)Reason is true but Assertion is not
Answer
Answer:(a)

47. Which of the following argument favour Privatisation?( Choose the correct
alternative)
a)It creates competitive environment
b)It protects consumer sovereignty
c)Revive the PSU
d)All of the above

Answer
Answer:(d)

48. Which of the following industries were exclusively reserved for public sector.
( Choose the correct alternative)
a)Railway transport
b)Communication
c)Metro transport
d)All of the

Answer
Answer:(a)

49. Under 1991, which of the following reforms were introduced in financial
sector. ( Choose the correct alternative)
a)Freedom to import capital goods
b)Reduction in CRR and SLR
c)Change in MRTP act
d)All of the above

Answer
Answer:(b)