Which of the following statement (s) is/are correct in the context of economic crisis of 1991?

Statement 1: The origin of the financial crisis of 1991 can be traced from the inefficient management of the Indian economy in the 1970s and 1980s.

Statement 2: In the late 1980s, government expenditure began to exceed its revenue by such large margins that meeting the expenditure through borrowings became unsustainable.

Only Statement 2 is correct.

The correct answer ios option 2: Only Statement 2 is correct.

Statement 1: The origin of the financial crisis of 1991 can be traced from the inefficient management of the Indian economy in the 1970s and 1980s. This is false. The origin of the financial crisis can be traced from the inefficient management of the Indian economy in the 1980s.

Statement 2: In the late 1980s, government expenditure began to exceed its revenue by such large margins that meeting the expenditure through borrowings became unsustainable. This is true.