Why there was a need for economic reforms in India ........

Why there was a need for economic reforms in India?

Due to fiscal deficit

Due to adverse BOP

Rise in prices

All of the above

- Option 1: Due to fiscal deficit

- A high fiscal deficit means a government is spending more than it earns.

- It can lead to inflation and hamper economic growth.

- Option 2: Due to adverse BOP

- Balance of Payments (BOP) measures a country’s transactions with the rest of the world.

- A negative BOP indicates that more money is leaving the economy than coming in, leading to currency devaluation.

- Option 3: Rise in prices

- High inflation erodes purchasing power.

- It can result in slower economic growth and hurt low-income groups the most.

- Option 4: All of the above

- Each issue described above contributed to economic instability in India.

- Reforms were essential to restore confidence and stability.

Answer: Option 4 - All of the above

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