Read the following statements carefully and choose the correct option regarding Assertion (A) and Reason (R).
Assertion (A): The New Economic Policy of 1991 resulted in the abolition of industrial licensing for most industries.
Reason (R): Licensing was re-imposed to regulate growing private sector monopolies.
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. A is true but R is false.
The New Economic Policy (NEP) of 1991 introduced Liberalization, which abolished industrial licensing for most sectors to encourage competition and efficiency. This ended the "License Raj." However, the reason is false because the government did not re-impose licensing to regulate monopolies. Instead, it moved toward a market-driven economy, replacing the restrictive MRTP Act with the Competition Act, 2002, to promote healthy competition rather than using licensing as a barrier.