Assertion: During the initial phase of planning in India, it was easier for a private entity to obtain a license if the industrial unit was to be established in an economically backward area.

Reasoning: The licensing policy was a tool in the hands of the government to promote regional equality.

Both Assertion (A) and reasoning (R) are correct and R is the correct explanation of A.

The correct answer is option 1: Both Assertion (A) and reasoning (R) are correct and R is the correct explanation of A.

During the initial phase of planning in India, the government implemented a licensing system to regulate industrial growth. One of the objectives of this system was to promote regional development by encouraging industries to establish in economically backward areas.

To achieve this goal, the government offered incentives to private entities that proposed to set up industrial units in these regions. This included making it easier to obtain a license, providing tax benefits, and offering subsidized infrastructure. By providing these incentives, the government aimed to attract investment to backward areas and promote their industrial development.

Therefore, the reasoning (R) accurately explains the assertion (A). The licensing policy was a tool used by the government to promote regional equality by making it easier for private entities to establish industries in economically backward areas.