Question

Read the following Assertion (A) and Reason (R) carefully and choose the correct option.

Assertion (A): The IPR 1956 created an industrial classification into Schedules A, B, and C. Reason (R): This was to identify sectors for exclusive state control, joint sectors, and private sector operation

• A. Both A and R are true and R is the correct explanation of A.
• B. Both A and R are true but R is not the correct explanation of A.
• C. A is true but R is false
• D. A is false but R is true.

Answer 1

Answer:

A. Both A and R are true and R is the correct explanation of A.

Industrial Policy Resolution (IPR) 1956

• Historical Context: The IPR 1956 was adopted by the Indian Parliament in April 1956. It is often referred to as the 'Economic Constitution' of India because it formed the foundation for the Second Five-Year Plan, emphasizing rapid industrialization through the public sector.
• Purpose: It aimed to accelerate economic growth, promote social justice, and reduce income inequality, aligning with the Directive Principles of State Policy (DPSP) under the Indian Constitution, specifically Article 38 and Article 39.
• The Three-Tier Classification: The resolution categorized industries into three schedules to delineate the scope of state and private intervention:
  • Schedule A: Comprised 17 industries that were the exclusive responsibility of the State. This included strategic sectors like defense, atomic energy, iron and steel, and railways.
  • Schedule B: Contained 12 industries that were progressively state-owned but would also allow private enterprise to supplement government efforts.
  • Schedule C: Covered all remaining industries, which were left to the initiative and enterprise of the private sector, subject to the state's overall economic policy.
• Significance for Competitive Exams: The IPR 1956 marked a shift from the IPR 1948 by expanding the scope of the public sector. It provided the regulatory framework for the Monopolies and Restrictive Trade Practices (MRTP) Act and the system of industrial licensing.