Question

‘Under the Industrial Policy Resolution (IPR) 1956 in India, the system of industrial licensing was introduced to promote regional equality.’

Justify the given statement with valid arguments.

Answer 1

1. Under the Industrial Policy Resolution (IPR) 1956, the policymakers reserved a category of industries for the private sector, however, the sector was kept under state control through a system of licenses. No new industry was allowed unless a license was obtained from the government.
2. It was easier to obtain a license if the industrial unit was established in an economically backward area. In addition, such units were given certain benefits such as tax holidays and subsidised electricity. The purpose of this policy was to promote regional equality.