Question

What economic changes were initiated by the government under the Industrial Policy, 1991?

पर्याय

• Abolition of Licensing

• Dereservation

• Augmentation of Production Capacity

• All of the above

Answer 1

All of the above

Explanation - 

Government of India introduced the Industrial Policy, in July 1991. Major highlights of the policy are as follows :

1. Abolition of Licensing : The compulsory licencing system was abolished under the new industrial policy of 1991. In other words, as a result of the industrial reforms, private players were free to start new businesses without the need for a licence.
2. Dereservation : The number of industries solely reserved for the public sector has been significantly reduced. The private sector was allowed to operate in the majority of industries, with only three industries under the sole jurisdiction of the government, namely railways, atomic minerals, and atomic energy.
3. Augmentation of Production Capacity : Prior to the policy, industries needed permission from the government to expand their production scale. With the liberalisation policy, MRTP companies (companies with assets worth more than Rs 100 crore) were free to expand their business scale in accordance with market conditions.