Arrange the following events in chronological order :
(A) Indian economic crisis due to external debt
(B) WTO was founded
(C) Financial help provided from World Bank and IMF
(D) Liberalisation policy introduced in India to lift trade barriers.
Choose the correct answer from the options given below :
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → (A), (C), (D), (B)
The first three events all took place in 1991, one leading to the next.
(A) Indian economic crisis due to external debt — in 1991 India could not repay its loans from abroad. Its foreign exchange reserves could pay for imports for only about two weeks.
(C) Financial help provided from World Bank and IMF — the World Bank and the International Monetary Fund (IMF) lent India $7 billion.
(D) Liberalisation policy introduced in India to lift trade barriers. — in return, India accepted their conditions. It announced the New Economic Policy, which removed many controls and trade barriers.
(B) WTO was founded — the World Trade Organisation was founded in 1995.
NCERT (2026-27): “3.1 Introduction … In 1991, India met with an economic crisis relating to its external debt — the government was not able to make repayments on its borrowings from abroad; foreign exchange reserves, which we generally maintain to import petroleum and other important items, dropped to levels that were not sufficient for even a fortnight.… 3.2 Background … India approached the International Bank for Reconstruction and Development (IBRD), popularly known as World Bank and the International Monetary Fund (IMF), and received $7 billion as loan to manage the crisis. For availing the loan, these international agencies expected India to liberalise and open up the economy by removing restrictions on the private sector, reduce the role of the government in many areas and remove trade restrictions between India and other countries. India agreed to the conditionalities of World Bank and IMF and announced the New Economic Policy (NEP). The NEP consisted of wide ranging economic reforms. The thrust of the policies was towards creating a more competitive environment in the economy and removing the barriers to entry and growth of firms.… World Trade Organisation (WTO): The WTO was founded in 1995 as the successor organisation to the General Agreement on Trade and Tariff (GATT). GATT was established in 1948 with 23 countries as the global trade organisation to administer all multilateral trade agreements by providing equal opportunities to all countries in the international market for trading purposes.…” |