Consider the following statements:
Statement I: The Industrial Policy Resolution of 1956 aimed to promote private sector dominance in all key industries.
Statement II: The Industrial Policy Resolution 1956 classified industries into three categories: fully government-owned, mixed sector
with government lead, and private sector.
Which of the above statements is/are correct?
Show answer & explanation
Correct answer: B
Explanation
Answer: Statement I is incorrect, Statement II is correct
Explanation: The Industrial Policy Resolution 1956 was a landmark economic policy of independent India that established the framework for a mixed economy.
Statement I is incorrect: The 1956 resolution did not promote private sector dominance. Instead, it emphasized a dominant role for the public sector, especially in heavy and strategic industries. The private sector was allowed but with a regulated and limited role.
Statement II is correct: The policy classified industries into three schedules:
Schedule A: Fully state-owned industries (public sector dominance)
Schedule B: Industries with increasing state participation (mixed economy model)
Schedule C: Remaining industries left to the private sector
This classification reflected India’s socialist-inspired planning approach at the time.
Additional Key Facts
The policy was influenced by the goal of building a socialist pattern of society.
It strengthened the role of Public Sector Undertakings (PSUs).
It expanded the role of the state in industrial development and infrastructure.
It laid the foundation for India’s planned economy model before liberalization in 1991.
Potential Exam-Oriented Questions & Answers
Question: How many categories of industries were defined in IPR 1956?
Answer: Three categories (Schedule A, B, and C)
Question: IPR 1956 was based on which economic ideology?
Answer: Socialist pattern of society