For which one of the basic reasons, the “Structural Adjustment Programme” was undertaken in India in 1991?

Correct option is C

The correct answer is (c) Establishing a free market economy.
The Structural Adjustment Programme (SAP), launched in 1991, was a response to a severe Balance of Payments crisis. It aimed to transition India from a highly regulated, "License Raj" system toward a market-oriented economy. By introducing Liberalization, Privatization, and Globalization (LPG), the government sought to integrate India with the global market, remove bureaucratic hurdles, and allow price mechanisms to be determined by demand and supply rather than state control.
INFORMATION BOOSTER
· New Economic Policy: SAP is the core component of the NEP 1991.
· Fiscal Discipline: It aimed to reduce the fiscal deficit and control high inflation.
· Deregulation: Abolished industrial licensing for most sectors to encourage entry.
· Global Integration: Reduced import tariffs to make the domestic industry competitive.
· IMF/World Bank: These reforms were part of the conditions for emergency financial assistance.
ADDITIONAL KNOWLEDGE
Option (a) is incorrect as the reforms aimed to increase competition, not curb it.
Option (b) is the opposite of the SAP goal; the program actually reduced the predominant role of public sector enterprises.
Option (d) refers to the pre-1991 era of planning and licensing, which the SAP specifically aimed to dismantle to favor efficiency over rigid administrative balancing.