The government initiated a variety of policies in new economic policy which fall under three headings:
(i) Liberalisation
(ii) Privatisation
(iii) Globalisation
Liberalisation means removing all unnecessary controls and restrictions like permits, licences, quotas, etc. imposed by the government. Liberalisation concept were introduced for the following reasons:
(i) To unlock the economic potential of the country by encouraging the private sector and multinational corporations to invest and expand.
(ii) To encourage the private sector to take an active part in the development process.
(iii) To reduce the role of the public sector in the future industrial development.
(iv) To introduce more competition into the economy with the aim of increasing efficiency.
The economic reforms under liberalisation taken by the government include the following:
(i) Industrial Sector Reforms
(ii) Financial Sector Reforms
(iii) Tax Reforms
(iv) Foreign Exchange Reforms
(v) Trade and Investment Policy Reforms
Industrial Sector Reforms
The new policy abolished the requirement of obtaining a licence for all industries except alcohol, cigarettes, hazardous chemicals, industrial explosives, electronics, aerospace, and drugs and pharmaceuticals. Licence is no longer required to set up new units or to expand the existing one.
Under the new industrial policy, the number of industries reserved only for the public sector was reduced from 17 to only 3.
It is only (i) Defense equipment (ii) Atomic energy generation (iii) Railway transport.
Read the following statements - Assertion (A) and Reason (R):
Assertion (A) - In many industries, the market has been allowed to determine prices based on market forces rather than government directives.
Reason (R) - All industries, including alcohol, cigarettes, hazardous chemicals, industrial explosives, electronics, aerospace, and drugs and pharmaceuticals, are no longer required to obtain a licence under the new policy.
[0.80 marks]
The government initiated a variety of policies in new economic policy which fall under three headings:
(i) Liberalisation
(ii) Privatisation
(iii) Globalisation
Liberalisation means removing all unnecessary controls and restrictions like permits, licences, quotas, etc. imposed by the government. Liberalisation concept were introduced for the following reasons:
(i) To unlock the economic potential of the country by encouraging the private sector and multinational corporations to invest and expand.
(ii) To encourage the private sector to take an active part in the development process.
(iii) To reduce the role of the public sector in the future industrial development.
(iv) To introduce more competition into the economy with the aim of increasing efficiency.
The economic reforms under liberalisation taken by the government include the following:
(i) Industrial Sector Reforms
(ii) Financial Sector Reforms
(iii) Tax Reforms
(iv) Foreign Exchange Reforms
(v) Trade and Investment Policy Reforms
Industrial Sector Reforms
The new policy abolished the requirement of obtaining a licence for all industries except alcohol, cigarettes, hazardous chemicals, industrial explosives, electronics, aerospace, and drugs and pharmaceuticals. Licence is no longer required to set up new units or to expand the existing one.
Under the new industrial policy, the number of industries reserved only for the public sector was reduced from 17 to only 3.
It is only (i) Defense equipment (ii) Atomic energy generation (iii) Railway transport.
Assertion (A) - In many industries, the market has been allowed to determine prices based on market forces rather than government directives.
Reason (R) - All industries, including alcohol, cigarettes, hazardous chemicals, industrial explosives, electronics, aerospace, and drugs and pharmaceuticals, are no longer required to obtain a licence under the new policy.
[0.80 marks]
The correct option is B Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
Under the new industrial policy, the number of industries reserved only for the public sector was reduced from 17 to only 3.
In many industries, the market has been allowed to determine the prices through forces of the market and not by directive policy of the government. The new policy abolished the requirement of obtaining a licence for all industries except the alcohol, cigarettes, hazardous chemicals, industrial explosives, electronics, aerospace, and drugs and pharmaceuticals.
Under the new industrial policy, the number of industries reserved only for the public sector was reduced from 17 to only 3.
In many industries, the market has been allowed to determine the prices through forces of the market and not by directive policy of the government. The new policy abolished the requirement of obtaining a licence for all industries except the alcohol, cigarettes, hazardous chemicals, industrial explosives, electronics, aerospace, and drugs and pharmaceuticals.
