CA Foundation · Business Economics · Indian Economy
The Industrial Policy Resolution of 1991 introduced a major change in industrial policy. Which of the following was a key feature of this New Industrial Policy?
The 1991 New Industrial Policy abolished industrial licensing for most industries, retaining it only for a small list of strategic, security or environment-sensitive sectors. It also reduced public sector reservation and encouraged foreign investment, marking a shift from controls toward liberalisation.
- AExtension of the compulsory licensing requirement to all industries
- BAbolition of industrial licensing for most industries except a few specified onesCorrect
- CIncrease in the number of industries reserved exclusively for the public sector
- DComplete ban on foreign direct investment in manufacturing
Explanation
The 1991 policy delicensed most industries, keeping licensing only for a short list on grounds such as security, strategic and environmental concerns. It also reduced the public sector reservation and welcomed FDI. Option C reverses this, as reserved industries were cut, not increased.
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