The Industrial Policy Resolution 1956 played a significant role in shaping India's industrial development strategy. What was a key feature of this resolution?
Show answer & explanation
Correct answer: C
Explanation
Answer: It categorized industries into three schedules, with the public sector leading in strategic and heavy industries.
Explanation
The Industrial Policy Resolution (IPR) of 1956 is often called the Economic Constitution of India. It was adopted to reflect the goals of the Second Five-Year Plan, which aimed for a socialistic pattern of society.
The core of this resolution was the classification of industries into three distinct schedules:
Schedule A: Industries that were the exclusive responsibility of the State (17 industries, including arms, ammunition, atomic energy, and railways).
Schedule B: Industries that would be progressively state-owned, but where private enterprise was expected to supplement the efforts of the State (12 industries, such as fertilizers, aluminum, and synthetic rubber).
Schedule C: All remaining industries, which were left open to the private sector, though still subject to government regulation and licensing.
Key Facts for Exams
Constitutional Goal: To achieve a socialist pattern of society as envisioned by Jawaharlal Nehru.
Industrial Licensing: It introduced a strict licensing system (often called the License-Permit Raj) to regulate private sector growth and promote regional equality.
Regional Balance: The policy used incentives and licensing to encourage industries to set up in backward regions to reduce regional disparities.
Exam-Related Practice Questions
Q: Which Five-Year Plan was based on the Industrial Policy Resolution of 1956?
Answer: The Second Five-Year Plan (Mahalanobis Model)
Q: How many industries were exclusively reserved for the public sector under Schedule A of the 1956 Resolution?
Answer: 17 industries