SSC CGL 2025 Tier-I · 23 September 2025, Shift 3 · General Awareness · Question 25 of 100

We transcribed this text from the pictures on a candidate's response sheet for this shift; the answer is the key SSC colour-marked on that sheet. Solution last reviewed 13 September 2026.

Where this paper and its answers come from

SSC does not publish CGL question papers or a public answer key. From 2025 the candidate response sheet prints every question and option as a picture, so the text here is transcribed from those pictures for this shift and checked against them independently; where the layout carries meaning, the picture is shown as well. Each answer is the key SSC colour-marked on that sheet. SSC released a tentative key for challenge and later its final one, both only to candidates behind a login, and the sheet does not say which of the two it carries. The solutions are written by UnlockIAS.

What was the major short-term objective of the stabilization measures in the 1991 reforms?

(a)Increase agricultural production
(b)Enhance social sector spending
(c)Control inflation and restore balance of payments
(d)Privatize public sector units

Answer

Why

Correct — C. The 1991 reforms combined two kinds of measures. Stabilisation measures were short-term: they aimed to correct the weaknesses in the balance of payments and to bring inflation under control.

In practice that meant rebuilding foreign exchange reserves and keeping rising prices in check. Structural reforms, such as privatisation, were the long-term part → option (c).

Why the others are wrong

(a)
Increase agricultural production — Farm output was not the stabilisation target. The 1991 emergency was a shortage of foreign exchange with rising prices, and the short-term measures addressed those.
(b)
Enhance social sector spending — Stabilisation pulled the other way. Controlling inflation and the balance of payments meant cutting the fiscal deficit, which restrains government spending rather than enlarging it.
(d)
Privatize public sector units — Privatisation is a structural reform, not stabilisation. It aimed at efficiency over the long term, while stabilisation dealt with the immediate crisis.

Concept

By 1991 India faced a balance-of-payments crisis. Foreign exchange reserves had fallen so low that they could barely pay for two weeks of imports, and prices were rising. India turned to the IMF and the World Bank for loans.

The New Economic Policy that followed had two parts. Stabilisation handled the immediate crisis. Structural reform, through liberalisation, privatisation and globalisation, aimed at long-term efficiency and competitiveness.

NCERT's Class 11 economics text draws this line: stabilisation measures are short-term, structural reforms long-term. The stem's word 'short-term' points to the first.

Key facts

Stabilisation measures (1991): short-term, to correct the balance of payments and control inflation.
Structural reforms (1991): long-term, to raise efficiency and international competitiveness.
In 1991 foreign exchange reserves could barely finance two weeks of imports.
India sought loans from the IMF and the World Bank to meet the 1991 crisis.

Study next

Liberalisation, privatisation and globalisation after 1991The rupee devaluation of July 1991Disinvestment in public sector undertakings

Common traps

Picking privatisation because it is the best-known 1991 reform. It is a long-term structural measure, not stabilisation.
Assuming the reforms meant more public spending. Stabilisation meant cutting the fiscal deficit.

Here the 1991 reforms are asked through the stabilisation–structural split. The crisis behind them is asked at 17 Sep 2025, 16:00, GA Q.21 (keyed: foreign exchange) and GA Q.22, on reserves that could barely finance two weeks of imports.

Related PYQs

No directly related past PYQ was found.

Topic: Economic Scene — all 144 SSC CGL questions on it, every solved shift.