Which one of the following is correct regarding stabilization and structural adjustment as two components of the new economic policy adopted in India?
✓ Correct answer: b) Structural adjustment is a gradual multi-step process, while stabilization is a quick adaptation process
ExplanationStabilization refers to short-term macroeco-nomic policies aimed at reducing inflation, fiscal deficit, and balance of payments crises.It involves quick adjustments to restore financial stability.To stabilize the economy in 1991, India immediately raised interest rates to control inflation and stabilize foreign reserves.Structural adjustment refers to long-term reforms focused on improving the efficiency of the economy through trade liberalization, privatization, and regulatory reforms.These are gradual and multi-step processes.Ex- After the 1991 stabilization measures, India undertook long-term structural reforms such as liberalizing trade and privatizing state- owned enterprises.31
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