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MCQs – India Economic reforms and their impact

1. : India’s economic liberalization, initiated in 1991, primarily aimed to:

(A) Increase government control over the economy


(B) Encourage private sector participation and foreign investment


(C) Nationalize major industries


(D) Promote self-sufficiency through import substitution



2. : Which sector experienced significant growth as a result of India’s economic reforms?

(A) Public sector enterprises


(B) Agriculture


(C) Service industry, particularly IT and BPO


(D) Cottage industry



3. : The introduction of the Goods and Services Tax (GST) in India aimed to:

(A) Reduce the overall tax burden on businesses


(B) Simplify the tax structure and improve compliance


(C) Increase tariffs on imports to protect domestic industries


(D) Nationalize the banking sector



4. : Foreign Direct Investment (FDI) inflows into India increased significantly after economic reforms primarily due to:

(A) Restrictions on foreign investment


(B) Streamlined approval processes and liberalized policies


(C) High tariffs on imported goods


(D) Emphasis on import substitution



5. : The economic reforms in India led to an increase in:

(A) Poverty and income inequality


(B) Government control over the economy


(C) Industrial stagnation


(D) Economic growth and globalization



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