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 two categories. 3. No new industry was allowed unless a license was obtained from the government.
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 Five Year 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 incorrect. The first category comprised industries which 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. It was easier to obtain a license if the industrial unit was established in an economically backward area. Besides, such units were given certain concessions such as tax benefits and electricity at a lower tariff. The purpose of this policy was to promote regional equality.