Question : Statement 1: External sector reforms in India aimed to attract foreign direct investment (FDI).
Statement 2: External sector reforms focused on imposing stricter trade barriers.
Option 1: Both statements are true.
Option 2: Both statements are false.
Option 3: Statement 1 is true, and statement 2 is false.
Option 4: Statement 1 is false, and statement 2 is true.
Correct Answer: Statement 1 is true, and statement 2 is false.
Solution : The correct answer is (c) Statement 1 is true, and statement 2 is false.
Statement 1 is true. The external sector reforms introduced in the 1991 economic policy aimed to attract foreign investment and promote economic growth. Various measures were implemented to encourage and facilitate foreign direct investment, such as liberalizing FDI policies, reducing restrictions, and creating a more favorable business environment for foreign investors.
Statement 2 is false. The objective of external sector reforms was to promote trade liberalization and reduce trade barriers. The reforms aimed to open up the Indian economy to international trade, promote exports, and integrate India into the global market. Measures such as tariff reductions, import liberalization, and export promotion were implemented to facilitate trade and remove restrictions.
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