Question

Elaborate the reasons owing to which the private sector was regulated under the Industrial Policy Resolution, 1956.

Hint:

Government regulation in the 1956 Industrial Policy aimed at economic equality, regional balance, and preventing monopolies.

Answer 1

Understanding the Industrial Policy Resolution, 1956:
- The policy aimed at achieving a socialist pattern of society by emphasizing state control over key industries while regulating private enterprises. Reasons for Regulation of the Private Sector:
1. Preventing Concentration of Wealth: - To avoid monopolistic practices and ensure equitable distribution of resources.
2. Encouraging Public Sector Growth: - Strategic industries like heavy machinery, defense, and infrastructure were placed under government control.
3. Ensuring Balanced Regional Development: - The government aimed to spread industrialization across various regions instead of concentrating in urban areas.
4. Protecting Labor and Consumers: - Regulations ensured fair wages, labor rights, and consumer protection from exploitative practices.
5. Planned Economic Growth: - Government intervention was necessary to align industrial expansion with national five-year plans.
Step 3: Conclusion. The Industrial Policy Resolution, 1956, played a crucial role in shaping India’s economic landscape by balancing public sector dominance with controlled private sector participation.