Which of the two factors enhanced the growth rate of Indian economy in the 1980s as per Arvind Panagariya?

A. Attitudinal change amongst the policy makers.

B. Export incentives for private companies.

C. Political leadership was skeptical about import substitution industrialization.

D. A more realistic exchange rate policy.

Choose the correct answer from the options given below:

The correct answer is 1. 

Key Points

According to Arvind Panagariya the two factors that enhanced the growth rate of the Indian economy in the 1980s were: 

1. Export incentives for private companies. 

2. A more realistic exchange rate policy. 

• In the 1980s, following the balance of payments crisis, a process of deregulation of industry management began and reforms were initiated in the Indian economy.  

• Several export incentives were introduced or extended to private companies, such as linking imports to exports, relaxation of foreign exchange barriers on certain imports, granting replenishment (REP) licenses to exporters, delicensing, broad banding etc. 

• Additionally, the government introduced a realistic exchange rate policy which led to a substantial increase in exports and increased economic growth. 

Therefore, only B and D statements are correct.