Question : The 1991 economic policy led to a shift from a __________ economy to a market-oriented economy.
Option 1: Socialist
Option 2: Capitalist
Option 3: Mixed
Option 4: Command
Correct Answer: Socialist
Solution : The correct answer is (a) Socialist
The 1991 economic policy in India led to a shift from a predominantly socialist economy to a market-oriented economy. Before the reforms, India followed a socialist-inspired economic model with a significant degree of government control and regulation in various sectors. Industries were often owned or heavily influenced by the state, and the government played a dominant role in resource allocation and economic decision-making.
However, the economic reforms of 1991 aimed to liberalize and open up the Indian economy. The reforms introduced measures such as reducing government control, dismantling the license raj, promoting private sector participation, and attracting foreign investment. These changes were intended to introduce market-oriented policies, foster competition, and enhance economic efficiency.
