Question

Assertion (A): New Economic Policy (NEP), introduced in 1991, initiated liberalisation of the Indian Economy.

Reason (R): Liberalisation, privatisation, and globalisation are 3 main components of the New Economic Policy.

Alternatives:

Options

• Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).

• Both Assertion (A) and Reason (R) are true, and Reason (R) is not the correct explanation of Assertion (A).

• Assertion (A) is true, but Reason (R) is false.

• Assertion (A) is false, but Reason (R) is true.

Answer 1

Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).

Explanation:

The 1991 New Economic Policy, adopted after a balance‑of‑payments crisis, initiated liberalisation by removing trade, investment, and licensing restrictions; its three pillars were liberalisation, privatisation, and globalisation.