Practicing Success

Target Exam

CUET

Subject

Business Studies

Chapter

Business Environment

Question:

Globalisation means the integration of the various economies of the world leading towards the emergence of a cohesive global economy. Till 1991, the Government of India had followed a policy of strictly regulating imports in value and volume terms. These regulations were with respect to
(a) licensing of imports
(b) tariff restrictions
(c) quantitative restrictions.
The new economic reforms aimed at trade liberalisation were directed towards import liberalisation, export promotion through rationalisation of the tariff structure and reforms with respect to foreign exchange so that the country does not remain isolated from the rest of the world. Globalisation involves an increased level of interaction and interdependence among the various nations of the global economy. Physical geographical gap or political boundaries no longer remain barriers for a business enterprise to serve a customer in a distant geographical market. This has been made possible by the rapid advancement in technology and liberal trade policies by Governments. Through the policy of 1991, the government of India moved the country to this globalisation pattern.

Prior to 1991, what was the approach of the Government of India towards imports in terms of value and volume?

Options:

Strict regulation

Complete liberalization

Export promotion

Voluntary restrictions

Correct Answer:

Strict regulation

Explanation:

Till 1991, the Government of India had followed a policy of strictly regulating imports in value and volume terms. Thus, prior to 1991 India was a closed economy. After 1991 new economic policy LPG, makes foreign industry to enter in India.