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 carefully and choose the correct answer from the following:
Statement 1 - Under the new industrial policy the number of industries reserved only for public sector was (i) Defense equipment, (ii) Atomic energy generation (iii) Railway transport.
Statement 2 - In industrial sector reform, freedom from licencing implied freedom from capacity constraints.
[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.
Statement 1 - Under the new industrial policy the number of industries reserved only for public sector was (i) Defense equipment, (ii) Atomic energy generation (iii) Railway transport.
Statement 2 - In industrial sector reform, freedom from licencing implied freedom from capacity constraints.
[0.80 marks]
The correct option is A Both the statements are true.
For expansion of production capacity, Freedom from licencing implied freedom from capacity constraints. What to produce and how much to produce is a matter of producer’s choice, which was earlier decided by the government.
For expansion of production capacity, Freedom from licencing implied freedom from capacity constraints. What to produce and how much to produce is a matter of producer’s choice, which was earlier decided by the government.
