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Zorluk: ZorEconomic Planning History, NITI Aayog, and Structural Reforms

With reference to the structural reforms and committee recommendations introduced during the 1991 Economic Reforms (LPG) in India, consider the following statements:

1. The Narasimham Committee (1991) on the Financial System recommended a phased reduction of both the Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) to augment liquidity for commercial bank credit.
2. The Raja Chelliah Committee was constituted to lay down the roadmap for comprehensive reforms in direct and indirect taxation.
3. The Rangarajan Committee (1993) on Disinvestment of Shares in Public Sector Enterprises recommended that equity disinvestment in non-reserved/non-core sectors should be strictly capped at 20%20\% to retain dominant state equity control.

Which of the statements given above is/are correct?

  1. 1 and 2 onlyCevap
  2. B
    1 and 3 only
  3. C
    2 and 3 only
  4. D
    1, 2 and 3

Cevap

Statements 1 and 2 are correct, while statement 3 is incorrect.
The option selecting statements 1 and 2 only is correct. The Narasimham Committee (1991) advocated reducing reserve requirements (SLR/CRR) to leave banks with adequate loanable funds, while the Raja Chelliah Committee formulated comprehensive tax structure reforms. Statement 3 is false because the 1993 Rangarajan Committee recommended disinvesting up to 49%49\% equity in reserved sectors and up to 100%100\% in non-reserved enterprises.

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1
Evaluate Statement 1 regarding the Narasimham Committee (1991).
The Narasimham Committee recommended lowering high statutory reserve ratios (CRR and SLR) to unlock commercial bank funds for private sector credit expansion. Thus, Statement 1 is correct.
Prior to 1991, high SLR and CRR locked up over 50%50\% of bank deposits into government pre-emptions.
2
Evaluate Statement 2 regarding the Raja Chelliah Committee.
The Tax Reforms Committee headed by Raja J. Chelliah (1991-1993) provided the foundational blueprint for reforming direct tax rates (lowering income/corporate tax rates) and simplifying indirect taxes (modvat/excise). Thus, Statement 2 is correct.
Chelliah committee recommendations formed the pillar of fiscal structural reforms under the 1991 LPG policy.
3
Evaluate Statement 3 regarding the Rangarajan Committee (1993) on Disinvestment.
The Rangarajan Committee recommended that disinvestment could go up to 49%49\% for industries reserved for the public sector, and up to 100%100\% in non-reserved/non-core industries. The 20%20\% limit was only an initial ad-hoc cap applied in 1991–92 before the committee's report. Thus, Statement 3 is incorrect.
The Rangarajan Committee advocated significantly higher equity dilution than the initial ad-hoc 20%20\% target.

Anahtar Kavram

Structural Reforms and High-Level Reform Committees of 1991 (LPG Era)
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Konular

Economic Planning History, NITI Aayog, and Structural Reforms