The 1991 crisis was characterized by a severe balance of payments problem. Foreign exchange reserves fell to critically low levels, fiscal deficit was high (govt expenditure exceeded income), and borrowed foreign exchange was used for consumption rather than productive investment. Options 1, 3, and 4 describe the opposite of actual crisis conditions. Option 2 correctly identifies a key feature.
Identify the statement associated with Indian Economic Crisis of 1991?
CUET UG 2023 — Economics Indian Economic Development
2023mcqeasy
Identify the statement associated with Indian Economic Crisis of 1991?
Official previous-year question
Verified 13 Jul 2026.
Options
- A
The income from public sector undertaking was very high.
- B
Our foreign exchange borrowed from other countries and financial institutions was spent on meeting consumption.
- C
Indian govt. income was greater than govt. expenditure
- D
There were sufficient amount of foreign exchange.
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