| I. 1994-95 was the year of the acute BOP crisis in India. |
| II. India then had foreign exchange reserve of mere 3 billion dollar |
| III. This crisis led to the massive changes in the country's economic policy, popularly known as the Structural Adjustment Program or New Economic Policy (NEP) regime, focusing on liberalization and global ization of the economy. |
A) I & III
B) I & II
C) Only III
D) Only I
Correct Answer: B
Solution :
Our country has been facing BOP disequilibrium right since independence, culminating into a disaster in 1990-91, the year of the acute BOP crisis. India then had foreign exchange reserve of mere 1 billion dollar, barely sufficient to finance a month's import bill. The country was on the verge of defaulting. This crisis led to the massive changes in the country's economic policy, popularly known as the Structural Adjustment Program or New Economic Policy (NEP) regime, focusing on liberalization and globalization of the economy.
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