Read the given passage carefully and answer the question :
The new Industrial Policy was announced in 1991. The major objectives of this policy were to build on the gains already made, correct the distortions or weaknesses that have crept in, maintain a sustained growth in productivity and gainful employment and attain international competitiveness.
Within this policy, measures initiated are: abolition of industrial licensing, free entry to foreign technology, foreign investment policy, access to capital market, open trade, abolition of phased manufacturing programme, and liberalised industrial location programme. The Policy has three main dimensions : liberalisation, privatisation and globalisation.
The threshold limits of assets have been scrapped and no industry requires prior approval for investing in the delicensed sector. They only need to submit a memorandum in the prescribed format. In the new industrial policy, Foreign Direct Investment (FDI) has been seen as a supplement to the domestic investment for achieving a higher level of economic development.
Which measures were NOT initiated under New Industrial Policy?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Ban on foreign investment
The passage states: “Within this policy, measures initiated are: abolition of industrial licensing, free entry to foreign technology, foreign investment policy, access to capital market, open trade, abolition of phased manufacturing programme, and liberalised industrial location programme.”
Option (1) Ban on foreign investment — Not initiated under the policy. The policy opened the door to foreign money. It brought in a foreign investment policy and saw Foreign Direct Investment (FDI) as a supplement to domestic investment. A ban is the opposite of this.
Option (2) Free entry to foreign technology — Initiated under the policy. Foreign technology was allowed to come in freely.
Option (3) Access to capital market — Initiated under the policy. Industries got access to the capital market to raise money.
Option (4) Abolition of industrial licensing — Initiated under the policy. Industries no longer needed a licence to start, except a few.