Which key reform in 1991 specifically addressed the inefficiency of public sector enterprises and promoted competition in industrial production?

Correct option is A

The correct answer is: (a) Privatization of profit-making PSUs
Explanation:
· The 1991 Economic Reforms (New Industrial Policy) introduced Privatization to reduce inefficiency in public sector enterprises (PSUs).
· This involved disinvestment of government equity in PSUs and opening sectors to private players, increasing efficiency and competition.
· Aim: Reduce government burden, improve productivity, and bring market discipline.
Information Booster:
· The 1991 reforms are known as LPG Reforms: Liberalization, Privatization, Globalization.
· Disinvestment began with selling minority stakes in PSUs to raise funds.
· Competition from private sector reduced monopoly of inefficient PSUs.
· Narasimha Rao Government and Finance Minister Manmohan Singh led the reforms.
· These reforms laid the foundation for India’s integration into the global economy.
Additional Knowledge:
· Fiscal Responsibility Act: Enacted in 2003 to control fiscal deficit, not related to 1991 reforms.
· Complex Industrial Licensing process: This was actually abolished under 1991 reforms ( end of License Raj), not introduced.
· Public Distribution System Reform: Related to food security, not industrial production.