India introduced "New economic policy" in the year 1991 in order to survive the financial crisis. According to you, which of the following was termed as "Short-term" measures?
Answer & explanation
Correct answer: option 2
The economic reforms of 1991 were introduced to survive the financial crisis. They were broadly classified into two groups: the stabilization measures and the structural reform measures. Stabilization measures are short-term measures, intended to correct some of the weaknesses that have developed in the balance of payments and to bring inflation under control. On the other hand, structural reform policies are long-term measures, aimed at improving the efficiency of the economy and increasing its international competitiveness by removing the rigidities in various segments of the Indian economy.