Question

Consider the following statements and mark the correct answer.

1. Industrial Policy Resolution 1956 was formed on the basis of the Second Five-Year Plan.

2. It classified industries into three categories.

3. No new industry was allowed unless a license was obtained from the government.

1. 1 and 2 only
2. 2 and 3 only
3. 1 and 3 only
4. 1, 2 and 3

Answer 1

Correct Answer - Option 4 : 1, 2 and 3

The correct answer is 1, 2, and 3 only.

Industrial Policy Resolution 1956 (IPR 1956):

• The Industrial Policy Resolution of 1956 was adopted with the goal of the state controlling the commanding heights of the economy.
• This resolution formed the basis of the Second FiveYear Plan, the plan which tried to build the basis for a socialist pattern of society. Hence, Statement 1 is correct.
• This resolution classified industries into three categories. Hence, Statement 2 is correct.
  • The first category comprised industries that would be exclusively owned by the state. 
  • The second category consisted of industries in which the private sector could supplement the efforts of the state sector, with the state taking the sole responsibility for starting new units. 
  • The third category consisted of the remaining industries which were to be in the private sector.
• Although there was a category of industries left to the private sector, the sector was kept under state control through a system of licenses.
• No new industry was allowed unless a license was obtained from the government. Hence, Statement 3 is correct.
• This policy was used for promoting industry in backward regions.
  • It aimed at Balanced Regional Growth.
  • The purpose of this policy was to promote regional equality