Correct Answer: Fiscal consolidation measures

Solution : The correct answer is (d) Fiscal consolidation measures

The 1991 economic policy in India aimed to address the economic challenges the country was facing, including a high fiscal deficit. Fiscal deficit refers to the excess of government spending over its revenue. To tackle this issue and promote fiscal discipline, the policy introduced several fiscal consolidation measures.

Fiscal consolidation measures typically involve a combination of expenditure control and revenue enhancement. The objective is to reduce the fiscal deficit and bring the government's finances on a sustainable path. Some of the measures adopted under the 1991 economic policy included:

1. Reduction in unproductive and wasteful government expenditure.

2. Rationalization of subsidies and targeted delivery mechanisms.

3. Introduction of tax reforms to broaden the tax base and increase revenue collection.

4. Streamlining public debt management to improve debt sustainability.

5. Enhancing transparency and accountability in public finances.