Match List-I (industrial policy of 1950-1990) with List-II (its purpo…

Match List-I (industrial policy of 1950-1990) with List-II (its purpose):

List-I	List-II
(A) Easier licence for a unit set up in an economically backward area	(I) Shielding small units from large firms
(B) Licence required even to expand output	(II) Complete government control of industries of great importance to the economy
(C) Reservation of products for small-scale industry	(III) Promoting regional equality
(D) State control of the commanding heights of the economy	(IV) Keeping output within what the economy required

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → (A)-(III), (B)-(IV), (C)-(I), (D)-(II)

The government used licences, reservation and its own control to steer industry during planning.

List-I	List-II	Reason
(A) Easier licence for a unit set up in an economically backward area	(III) Promoting regional equality	Industry was drawn to backward regions, which also got tax benefits and cheaper electricity.
(B) Licence required even to expand output	(IV) Keeping output within what the economy required	A licence to expand was given only if the economy needed more of the good.
(C) Reservation of products for small-scale industry	(I) Shielding small units from large firms	Small units cannot compete with big firms.
(D) State control of the commanding heights of the economy	(II) Complete government control of industries of great importance to the economy	This came from the decision to develop the economy on socialist lines.

NCERT (2026-27): “2.4 Industry and Trade … In addition, the decision to develop the Indian economy on socialist lines led to the policy of the government controlling the commanding heights of the economy, as the Second Five Year plan put it. This meant that the government would have complete control of those industries that were vital for the economy. …”

“… No new industry was allowed unless a license was obtained from the government. This policy was used for promoting industry in backward regions; it was easier to obtain a license if the industrial unit was established in an economically backward area. In addition, 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.”

“Even an existing industry had to obtain a license for expanding output or for diversifying production (producing a new variety of goods). This was meant to ensure that the quantity of goods produced was not more than what the economy required. …”

“… But these industries cannot compete with the big industrial firms; it is obvious that development of small-scale industry requires them to be shielded from the large firms. For this purpose, the production of a number of products was reserved for the small-scale industry; the criterion of reservation being the ability of these units to manufacture the goods. …”