Macroeconomic Fundamentals› Planning, 1991 Reforms & Inclusive Growth
Which policy measure has not been a part of Liberalisation, Privatisation and Globalisation ?
Answer b.
The answer is (b) Capital account convertibility. The 1991 reforms freed the current account but did not open the capital account fully. The 1991 reforms liberalised industry and trade, opened the economy to foreign investment, and began privatisation through disinvestment of public sector shares. India moved to current account convertibility in 1994 but did not adopt full capital account convertibility; the Tarapore Committee only set out a roadmap to it. FDI in retail and in defence production was opened up step by step as part of the same liberalising direction, and disinvestment has been a core privatisation measure since 1991-92. So capital account convertibility is the one that is not a part of the LPG package.
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