Which key reform in 1991 specifically addressed the inefficiency of public sector enterprises and promoted competition in industrial production?
Show answer & explanation
Correct answer: A
Explanation
Correct Answer: Option 1 – Privatization of profit-making PSUs
Solution:
The 1991 New Industrial Policy aimed to improve the efficiency of Public Sector Undertakings (PSUs) by reducing the government's role in industries and encouraging private sector participation. It promoted privatization/disinvestment and competition, which helped address the inefficiency of public sector enterprises.
- Option 1: Correct – Privatization/disinvestment was a key reform under the 1991 Industrial Policy.
- Option 2: Fiscal Responsibility Act (FRBM Act) was enacted in 2003, not in 1991.
- Option 3: The 1991 reform actually abolished most industrial licensing (de-licensing), rather than introducing a complex licensing process.
- Option 4: Public Distribution System (PDS) reforms relate to food security, not industrial policy.
Answer: Option 1 – Privatization of profit-making PSUs