Which of the following is/are correct in the context of policy initiatives introduced in the budget for the year 1991-92 for correcting the fiscal imbalance?
i. Reduction in fertiliser subsidy
ii. Abolition of subsidy on sugar

Correct option is B

In the budget of 1991-92, as part of the economic reforms to reduce fiscal imbalance, fertilizer subsidies were reduced. However, there was no abolition of the sugar subsidy, making statement ii incorrect.

Information Booster

1. The 1991-92 budget was a key moment in Indian economic history, marking the shift towards liberalization.
2. The focus was on reducing fiscal deficit, improving foreign exchange reserves, and promoting private sector participation.
3. Structural reforms included devaluation of the rupee, reducing tariffs, and industrial policy changes.
4. Reduction in subsidies was aimed at controlling excessive government expenditure.
5. Fertilizer subsidy reduction was implemented cautiously to avoid impacting farmers significantly.

Additional Knowledge

• Fertilizer Subsidy (i): India continues to provide subsidies to farmers but has rationalized it over time.
• Sugar Subsidy (ii): Though sugar subsidies were not abolished, the government regulates sugar prices and occasionally provides export incentives.
• 1991 Reforms: Initiated under P.V. Narasimha Rao's government with Manmohan Singh as the finance minister.