Government had to play an extensive role in promoting the industrial sector in post independence era.

According to you which of the following option is the correct reason for the above statement?

Both 1 and 3

The correct answer is Option 4: Both 1 and 3

After independence, India did have private entrepreneurs. Business houses like Tata, Birla, Bajaj, etc. were already operating in the country. So it is not correct to say that private entrepreneurship was absent.

After independence, India needed rapid industrialisation, especially in heavy and basic industries. However:

1. Indian industrialists did not have sufficient capital to undertake large-scale and long-gestation industrial projects such as steel, power, and heavy machinery.

2. The size of the domestic market was small, due to low incomes and widespread poverty, which discouraged private investment in large industries.

NCERT: At the time of independence, Indian industrialists did not have the capital to undertake investment in industrial ventures required for the development of Indian economy; nor was the market big enough to encourage industrialists to undertake major projects even if they had the capital to do so. It is principally for these reasons that the erstwhile governments had to play an extensive role in promoting the industrial sector. 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