Question : Assertion: Trade reforms in the 1991 economic policy aimed to reduce import tariffs.
Reason: Lower import tariffs can stimulate domestic industries and enhance competitiveness.
Option 1: Both assertion and reason are true, and the reason is the correct explanation of the assertion.
Option 2: Both assertion and reason are true, but the reason is not the correct explanation of the assertion.
Option 3: Assertion is true, but the reason is false.
Option 4: Assertion is false, but the reason is true.
Correct Answer: Both assertion and reason are true, but the reason is not the correct explanation of the assertion.
Solution : The correct answer is (b) Both assertion and reason are true, but the reason is not the correct explanation of the assertion.
While it is true that trade reforms in the 1991 economic policy aimed to reduce import tariffs, the reason provided, which states that lower import tariffs can stimulate domestic industries and enhance competitiveness, is not the correct explanation of the assertion. The main objective of reducing import tariffs was to liberalize trade, promote exports, and open up the Indian economy to international markets. Lower import tariffs can help in increasing access to foreign goods and promoting international trade, but the direct impact on stimulating domestic industries and enhancing competitiveness is not explicitly explained by the reduction in import tariffs alone. There are various factors that contribute to the competitiveness of domestic industries, such as innovation, productivity, infrastructure, and government policies beyond import tariffs.
