UPSC Prelims 1996·GS1·economy·planning

Which one of the following is correct regarding stabilization and structural adjustment as two components of the new economic policy adopted in India?

Dalvoy logo
Reviewed by Dalvoy
UPSC Civil Services preparation
Last updated 8 Jul 2026, 4:39 pm IST
  1. AStabilization is a gradual, multi-step process while structural adjustment is a quick adaptation process
  2. BStructural adjustment is a gradual, multi-step process, while stabilization is a quick adaptation processCorrect
  3. CStabilization and structural adjustment are very similar and complementary policies. It is difficult to separate one from the other
  4. DStabilization mainly deals with a set of policies which are to be implemented by the Central Government while structural adjustment is to be set in motion by the State Governments

Explanation

The correct answer is B because stabilization and structural adjustment represent two different time horizons of economic reform.

Stabilization policies are short term measures intended to restore economic stability. They focus on controlling inflation and correcting the balance of payments crisis. Because these involve immediate fiscal and monetary corrections, they are considered a quick adaptation process.

Structural adjustment policies are long term measures aimed at improving the efficiency of the economy and increasing its international competitiveness. These involve deep rooted changes like industrial deregulation, trade reforms, and privatization. Since these reforms require institutional changes and sectoral shifts, they are implemented as a gradual, multi step process.

economy: Which one of the following is correct regarding stabilization and structural adjustment as two components of the new eco
ShareWhatsAppXTelegram

Related questions

More UPSC Prelims practice from the same subject and topic.