UPSC Prelims 2003·GS1·economy·open economy

Assertion (A): The new EXIM Policy is liberal, market oriented and favours global trade. Reason (R): GATT has played a significant role in the liberalisation of economy.

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  1. ABoth A and R are individually true and R is the correct explanation of A
  2. BBoth A and R are individually true but R is NOT the correct explanation of ACorrect
  3. CA is true but R is false
  4. DA is false but R is true

Explanation

The correct answer is B because both statements are factually accurate, but the Reason does not directly explain the Assertion.

Assertion A is true because the Export Import Policy introduced during the 1990s reforms focused on removing trade barriers, reducing licenses, and integrating India with the global market.

Reason R is also true because the General Agreement on Tariffs and Trade served as a global framework that encouraged member nations to reduce tariffs and promote free trade, leading to global economic liberalization.

However, B is the correct choice because Indias specific shift toward a liberal EXIM policy was primarily a result of its domestic Balance of Payments crisis and the 1991 economic reforms. While GATT created a general global environment for trade, it was not the direct or immediate cause for the formulation of Indias specific new EXIM policy. Therefore, R is a true statement but not the specific explanation for A.

economy: Assertion (A): The new EXIM Policy is liberal, market oriented and favours global trade. Reason (R): GATT has played a s
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