CA Foundation · Business Economics · Indian Economy
Which of the following was a key feature of industrial policy reform introduced in 1991 as part of liberalisation?
The 1991 industrial policy abolished industrial licensing for most industries, keeping it only for a short list of strategic, safety or environmental sectors. This freed private firms to expand and enter industries without prior government permission, unlike the earlier licence-permit regime.
- AExtension of industrial licensing to all industries
- BAbolition of industrial licensing for most industries except a few specified onesCorrect
- CReservation of all heavy industries for the public sector
- DImposition of quantitative restrictions on all imports of capital goods
Explanation
The New Industrial Policy of 1991 abolished industrial licensing for most industries, retaining it only for a small list related to security, strategic concerns, environmental issues and hazardous chemicals. The other options describe the pre-reform licence-permit regime, which was dismantled.
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