RAS question
The New Economic Policy (LPG reforms) of 1991 was introduced by which Finance Minister?
Correct answer: (D) Manmohan Singh.
The New Economic Policy, or LPG reforms, of 1991 was introduced by Finance Minister Dr Manmohan Singh under Prime Minister P.V. Narasimha Rao.
Explanation
The 1991 LPG reforms are associated with Dr Manmohan Singh because, as Finance Minister, he presented the July 1991 Budget that marked the defining moment in India's move towards economic reform. The Ministry of Finance release describes 1991 as a watershed in India's economic history and links the reform turn to Dr Singh's Budget. India was then facing a severe balance of payments crisis, with foreign exchange reserves down to about $1 billion. The reforms therefore were not a routine policy adjustment; they shifted policy away from the earlier licence-control framework and towards liberalisation in the industrial, trade and financial sectors.
Why the other options are wrong
- (A) P. Chidambaram was a Finance Minister later, but he did not introduce the 1991 LPG reforms.
- (B) Pranab Mukherjee held the Finance portfolio in other periods, not at the 1991 reform moment identified with Dr Manmohan Singh.
- (C) Yashwant Sinha was Finance Minister during an NDA government, whereas the 1991 reforms were introduced under P.V. Narasimha Rao's government.
Concept
This tests the economic reforms segment of Indian Economy, especially the 1991 liberalisation-privatisation-globalisation shift. It recurs in RAS because the 1991 reforms are the standard starting point for questions on post-reform growth, markets and policy change in India.