Which term describes the 1991 shift toward liberalizing India's economy?

• A. Economic Liberalization (1991)
• B. Privatization
• C. Export Processing Zones (EPZs)
• D. Service Sector Growth

Answer: (A)

Economic liberalization describes the broad move to open up the economy and scale back government controls. In 1991, India faced a severe balance of payments crisis and launched a package of reforms to liberalize trade and investment, deregulate many industries, and reform the financial sector. This shift included easing licensing, reducing import barriers, encouraging foreign investment, and privatizing some state-owned enterprises, all aimed at making the economy more market-driven and globally integrated. Privatization is one tool within liberalization, but it doesn’t by itself capture the full set of reforms and policy direction. Export Processing Zones and service sector growth are part of the reforms and outcomes, but they don’t describe the overall shift.