Assertion (A) : The rate of growth of India’s exports has shown an appreciable increase after 1991. Reason (R) : The Govt. of India has resorted to devalu- ation.
✓ Correct answer: b) BothA and Raretrue but R is not a correct explanation ofA
ExplanationAssertion (A) is true : After the economic libe-ral- ization of 1991, India’s exports rate grew significantly, driven by policy reforms, trade liberalization, and integration with global markets.For instance, India’s merchandise exports rose from around $18 billion in 1991 to over $43 billion by 2000. This period saw increased foreign investments, removal of trade barriers, and diversification of export products, particular- ly in the IT and services sector.Reason (R) is true : One of the key policy measures undertak- en during 1991 was the devaluation of the Indian rupee by nearly 20% in two successive adjustments.This made Indi- an exports cheaper and more competitive in global markets, boosting export volumes.As per the Economic Survey 1991-92, devaluation was a crucial step in addressing India’s Balance of Payments crisis, enhancing foreign exchange reserves, and ac- celerating export-driven growth.While devaluation in 1991 contributed to making exports more competitive, the sustained increase in export growth was primarily due to broader economic reforms like trade liber- a
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