During the economic crisis of 1991, India introduced the New Economic Policy. Which of the following was a part of this policy?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Privatisation
The New Economic Policy of 1991 rested on liberalisation, privatisation and globalisation (LPG). Privatisation meant giving the private sector a larger role, including selling part of the shares of public sector enterprises.
Why the other options are incorrect
Option (1) Inward-looking trade strategy — Incorrect. This was India's trade policy before 1991; the new policy opened the economy to the world.
Option (2) Import substitution policy — Incorrect. Making at home what was imported was the policy of the earlier Five Year Plans, which the reforms moved away from.
Option (4) Both (1) and (2) — Incorrect. Both are features of the pre-1991 policy.