How did the government redefine the role of the public sector in the New Industrial Policy of 1991?

Reducing the involvement of the public sector

The correct answer is option 2- Reducing the involvement of the public sector.

The government redefine the role of the public sector in the New Industrial Policy of 1991 by reducing the involvement of the public sector.

The new set of economic reforms aimed at giving greater role to the private sector in the nation building process and a reduced role to the public sector. This was a reversal of the development strategy pursued so far by Indian planners. To achieve this, the government redefined the role of the public sector in the New Industrial Policy of 1991, adopted the policy of planned disinvestment of the public sector and decided to refer the loss making and sick enterprises to the Board of Industrial and Financial Reconstruction.