The economic reform, popularly known as, Liberalization, Privatization and Globalization was aimed at making the Indian economy as fastest growing economy and globally competitive. This process started in the:
Last updated May 13, 2026
Correct Answer:
Option A —
Early 1990s
The LPG (Liberalization, Privatization, and Globalization) reforms were officially launched in July 1991 by the government of P.V. Narasimha Rao, with Dr. Manmohan Singh as the Finance Minister. These reforms were a response to a severe Balance of Payments (BoP) crisis that left India with barely enough foreign exchange reserves to pay for two weeks of imports.
Key Components of the Reform:
Liberalization: Reducing government control and "License Raj" to allow private businesses to grow and operate more freely.
Privatization: Reducing the role of the public sector by selling government shares in Public Sector Undertakings (PSUs) to private players.
Globalization: Opening up the Indian economy to the world by reducing import duties and encouraging Foreign Direct Investment (FDI).
Answer verified by Quintessence Classes faculty — Karan Nagar, Srinagar.
