CMA Foundation · Fundamentals of Business Economics and Management · Economic and Business Environment
Which of the following was a feature of the industrial policy changes introduced after 1991 in India?
After 1991 industrial licensing was abolished for most industries, remaining only for a short list of strategic, security or hazardous sectors. This removed entry barriers and let firms expand freely, while public sector reservations were cut and foreign equity was permitted.
- AExtension of compulsory licensing to nearly all industries
- BAbolition of industrial licensing for most industries except a short list of specified onesCorrect
- CReservation of all heavy industries for the public sector
- DProhibition of foreign equity participation in manufacturing
Explanation
Post-1991 policy dismantled the licence-permit system, keeping licensing only for a small list such as those related to security, strategic concerns and hazardous chemicals. Public sector reservation was sharply reduced and foreign equity was allowed, so the other options are opposite to the reforms.
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