Before the introduction of "New economic policy" in 1991, how were the regulatory mechanism enforced in India?
Answer & explanation
Correct answer: option 4
In India, regulatory mechanisms were enforced in various ways:
(i) Industrial licensing under which every entrepreneur had to get permission from government officials to start a firm, close a firm or decide the amount of goods that could be produced.
(ii) Private sector was not allowed in many industries.
(iii) Some goods could be produced only in small-scale industries.
(iv) Controls on price fixation and distribution of selected industrial products.