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Answer the following. (Class 12 Economics 2026, Q33b)

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EconomicsCBSE Class 12 · Board exam 2026, set 58/5/1 · 6 marks · Long answer

CBSE Class 12 Economics 2026: question 33(b)

Set in the CBSE Class 12 board exam of 2026, paper 58/5/1, section B, question 33(b), for 6 marks. Try it first; the hints and our step-by-step solution are below.

Q33(b) · 6 marks · Long answerLiberalisation, Privatisation and Globalisation: An Appraisal

Answer the following.

  1. (i)

    "The Government of India may further divest its stake in Life Insurance Corporation (LIC) in the current financial year."
    In the light of economic reforms since 1991, identify the policy and define the step taken by the government.

    2 marks
  2. (ii)

    "India adopted an inward-looking trade strategy during the planning period."
    (I) State any two reasons behind the adoption of this policy. [1]
    (II) Briefly describe any two ways in which the government implemented this policy. [3]

    4 marks

Source: official question paper from cbse.gov.in (PDF). See it in the full 2026 board paper, set 58/5/1.

Hints

Open one hint at a time and try again before the next.

Hint 1

Selling a stake in a PSU is called what?

Hint 2

How can a government make imports costlier or limit them?

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. (i) The policy is disinvestment (part of privatisation under the 1991 reforms).

    1 mark

  2. (i) Disinvestment means the government selling part of its equity in public sector enterprises (here LIC) to the public or private investors.

    1 mark

  3. (ii)(I) Reasons for the inward-looking strategy: to replace imports with domestic production (import substitution) and to save scarce foreign exchange.

    1 mark

  4. (ii)(II) Tariffs: taxes on imported goods that make them more expensive and discourage their use, protecting domestic producers.

    1½ marks

  5. (ii)(II) Quotas: limits on the quantity of a good that can be imported, which restrict imports and protect domestic firms from foreign competition.

    1½ marks

Answer: (i) Disinvestment: selling part of the government's equity in a PSU. (ii) Inward-looking strategy to substitute imports and save foreign exchange; implemented through tariffs and quotas.

Where the marks are

  • Policy identified (1)
  • Disinvestment defined (1)
  • Two reasons (½ + ½)
  • Tariffs (1½)
  • Quotas (1½)

Revise the chapter

Practise this chapterBoard-style questions from Liberalisation, Privatisation and Globalisation: An Appraisal, one at a time, marked against the answer key and marking points.Back to the full paper2026 board paper, set 58/5/1: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.