Which one of the following crisis triggered the 'New Economic Reforms' of 1991?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Balance of Payment Crisis
The New Economic Reforms of 1991 were triggered by a severe Balance of Payment Crisis, where India had very low foreign exchange reserves and was unable to pay for essential imports. This led to economic liberalisation, privatisation, and globalisation policies.