Descriptive ESI Question | Structural Reforms – BoP crisis in 1991 | RBI Grade B 2023 Descriptive ESI

RBI Grade B 2023 - descriptive ESI

RBI Grade B 2023 – Descriptive ESI: How to write answer

How to write an answer for the question – What were the structural Reform measures taken in 1991 to end BoP crises in India?

To answer the question “What were the structural Reform measures taken in 1991 to end BoP crises in India?”, you could follow the following structure:

  1. Introduction: Briefly explain what the Balance of Payments (BoP) crisis was in India in 1991 and why it occurred.
  2. Structural reform measures: Explain the specific measures that were taken in 1991 to address the BoP crisis. These may include:
  • Liberalization of the industrial sector: Explain how the industrial sector was liberalized, including the abolition of industrial licensing and the reduction of government controls on investment.
  • Trade liberalization: Explain how trade liberalization was implemented, including the devaluation of the rupee and the reduction of import tariffs.
  • Financial sector reforms: Explain how financial sector reforms were implemented, including the introduction of market-determined interest rates and the opening up of the banking sector to private and foreign players.
  1. Results: Explain the impact of these measures on the BoP crisis, as well as on the Indian economy as a whole. This may include:
  • Reduction in external debt: Explain how the structural reforms led to a reduction in India’s external debt and an improvement in its BoP position.
  • Economic growth: Explain how the structural reforms contributed to a revival in economic growth and an increase in foreign investment.
  • Challenges and criticisms: Acknowledge any challenges or criticisms of the structural reforms, such as concerns about inequality and the impact on vulnerable populations.
  1. Conclusion: Sum up the main points of your answer and offer some final thoughts on the significance of the 1991 structural reforms for India’s economy and development.

When writing your answer, be sure to provide specific examples and evidence to support your arguments, and to structure your answer in a clear and logical way. Use headings and subheadings to break up your answer and make it easier to follow. Make sure to also proofread your answer carefully for spelling and grammatical errors before submitting it.