SSC CGL (Prelims) 1991 — solved question paper

Q1. Read the following Assertion (A) and Reason (R) carefully and choose the correct option. Assertion (A): The New Industrial Policy, 1991 reduced the role of industrial licensing in India. Reason (R): The policy aimed to promote liberalization, privatization, and greater participation of the private sector in the economy.

1. Both A and R are true and R is the correct explanation of A.
2. Both A and R are true but R is not the correct explanation of A.
3. A is true but R is false.
4. A is false but R is true.

Answer: Both A and R are true and R is the correct explanation of A.

The New Industrial Policy, 1991 did reduce the role of industrial licensing in India. This was because it was designed to promote liberalization, privatization, and greater private sector participation. Hence, both statements are true and the reason correctly explains the assertion.

Q2. Assertion (A): In 1991, India undertook a two-step devaluation of the rupee. Reason (R): The objective was to improve export competitiveness and ease the balance-of-payments crisis.

1. Both A and R are true and R is the correct explanation of A
2. Both A and R are true but R is not the correct explanation of A
3. A is true but R is false
4. A is false but R is true

Answer: Both A and R are true and R is the correct explanation of A

Both the assertion and the reason are true. In 1991, India devalued the rupee in two steps to make exports more competitive and to help address the balance-of-payments crisis, so the reason correctly explains the assertion.

Q3. India approached which of the following international financial institutions for balance of payments assistance during the 1991 economic crisis?

1. International Monetary Fund and World Bank
2. Asian Development Bank and UNESCO
3. World Trade Organization and UNDP
4. IMF and World Health Organization

Answer: International Monetary Fund and World Bank

During the 1991 balance of payments crisis, India sought assistance from the IMF and the World Bank. These institutions provided the needed external financial support. Hence, the correct answer is International Monetary Fund and World Bank.

Q4. How did the LPG (Liberalization, Privatization, Globalization) reforms of 1991 affect the Indian economy?

1. It increased the state's monopoly in all sectors
2. It reduced the growth of the IT sector
3. It promoted competition and efficiency in the private sector
4. It led to a total ban on foreign exports

Answer: It promoted competition and efficiency in the private sector

The 1991 LPG reforms reduced excessive government control, opened the economy, and encouraged private and foreign participation. This led to greater competition and improved efficiency in many sectors.

Q5. Read the following statements carefully and choose the correct option regarding Assertion (A) and Reason (R). Assertion (A): The 1991 reforms led to the opening of the Indian economy to foreign investors. Reason (R): The government wanted to increase the domestic savings rate rapidly.

1. Both A and R are true and R is the correct explanation of A
2. Both A and R are true but R is not the correct explanation of A
3. A is true but R is false
4. A is false but R is true

Answer: A is true but R is false

The 1991 economic reforms did open the Indian economy to foreign investment, so Assertion (A) is true. However, the reason given is false because the reforms were mainly introduced to address the balance of payments crisis and improve efficiency, not simply to raise domestic savings rapidly.

Q6. Economic reforms in India were introduced in which year?

1. 1991
2. 1984
3. 2001
4. 1977

Answer: 1991

India introduced major economic reforms in 1991 in response to a severe balance-of-payments crisis. These reforms marked the beginning of liberalization, privatization, and globalization.