Economic liberalisation mainly affects which sector?

Correct — D. Liberalisation removed controls across the whole economy, so its reach was not confined to one or two sectors.

Industry lost most licensing, banking and finance were opened up, and trade reform cut import duties and lifted quantitative restrictions on farm goods as well.

With all three sectors touched, the key is Primary, Secondary, and Tertiary: option (d).

Why the others are wrong

• (a)
  Primary and Tertiary — Leaves out industry, where reform began. The 1991 Industrial Policy abolished licensing for most industries, and industry is the secondary sector.
• (b)
  Primary and Secondary — Leaves out services. Financial-sector reform opened banking to new private banks, and banking is a tertiary activity.
• (c)
  Secondary and Tertiary — Leaves out agriculture. Trade reform cut import duties and lifted quantitative restrictions on farm goods too, exposing farmers to world prices.

The 1991 reforms had three strands: liberalisation, privatisation and globalisation. Liberalisation meant removing the controls the state had placed on economic activity.

It reached industrial licensing, the financial sector, taxation, the exchange rate, and trade and investment policy.

Those controls ran across farms, factories and services alike, which is why the key reads the effect as economy-wide.

Key facts

• The New Economic Policy of 1991 combined liberalisation, privatisation and globalisation.
• The 1991 Industrial Policy abolished industrial licensing for most industries.
• Financial-sector reform in the 1990s opened banking to new private-sector banks.
• Trade reform reduced import duties and removed quantitative restrictions on imports.

Common traps

• Tying liberalisation to industry alone because it began with delicensing: its trade and financial reforms reached farms and services too.
• Reading 'mainly' as a cue to pick two sectors: the key treats liberalisation as economy-wide.

No directly related past PYQ was found.