Question

61. External sector reforms under NEP included
(a) foreign exchange reforms
(b) foreign trade policy reforms
(c) both (a) and (b)
(d) none of these
by the
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Answer 1

Answer:

The correct answer to the question is option (b)- both (a) and (b).

Explanation:

Foreign trade,( exports and imports) play an important role in the economic development of any developing country. We import those goods from other countries which cannot be produced in our country because their raw Material or goods and technology may not be available and the consumption of those goods is high. We export those goods which are produced in surplus in our country and which we are able to produce at a low Cost. The exports of country should always be more than the imports. This will help us in earning foreign exchange and also help in increasing the production of our country. In 1991, when the new economic policy reforms were made, Foreign trade was also included into it. The Government focused on increasing  the exports and to reducing imports. Focus was laid on making make in products rather than importing from other countries. Many reforms were made in the Foreign trade policy:

1. Imports and exports were made free to boost foreign trade.

2. The policy of the  ‘survival of the fittest’ was adopted.

3. Market competition has replaced the policy of tariffs and quotas.

4. The benchmark for growth is Efficiency.

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