Today, three entrepreneurs plan new units in India:
P wants to set up a cigarette factory.
Q wants to set up a cement plant.
R wants to take up some core activities in railway transport.
Going by the reform policies introduced in and after 1991, which statement is correct?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → P needs an industrial licence; Q needs no licence; R cannot take it up, as it is reserved for the public sector.
After 1991, licensing stayed only for a few product groups, and only two areas stayed reserved for the public sector.
P cigarette factory — Cigarettes are one of the few products that still need an industrial licence.
Q cement plant — Cement is not among the licensed products, so no licence is needed.
R core activities in railway transport — Some core activities in railway transport are reserved for the public sector, so a private firm cannot take them up.
NCERT (2026-27): “Deregulation of Industrial Sector: … The reform policies introduced in and after 1991 removed many of these restrictions. Industrial licensing was abolished for almost all but product categories — alcohol, cigarettes, hazardous chemicals, industrial explosives, electronics, aerospace and drugs and pharmaceuticals. The only industries which are now reserved for the public sector are a part of atomic energy generation and some core activities in railway transport. …” |