Read the given passage carefully and answer the question :
The new Industrial Policy was announced in 1991. The major objectives of this policy were to build on the gains already made, correct the distortions or weaknesses that have crept in, maintain a sustained growth in productivity and gainful employment and attain international competitiveness.
Within this policy, measures initiated are: abolition of industrial licensing, free entry to foreign technology, foreign investment policy, access to capital market, open trade, abolition of phased manufacturing programme, and liberalised industrial location programme. The Policy has three main dimensions : liberalisation, privatisation and globalisation.
The threshold limits of assets have been scrapped and no industry requires prior approval for investing in the delicensed sector. They only need to submit a memorandum in the prescribed format. In the new industrial policy, Foreign Direct Investment (FDI) has been seen as a supplement to the domestic investment for achieving a higher level of economic development.
Which of the following is NOT a dimension of New Industrial Policy?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Centralisation
The passage states: “The Policy has three main dimensions : liberalisation, privatisation and globalisation.”
Option (1) Liberalisation — A dimension of the policy. Controls on industry, such as licensing, were removed.
Option (2) Centralisation — Not a dimension of the policy. Centralisation means keeping control in the hands of one central authority. The 1991 policy went the other way: it removed controls and gave more room to private and foreign firms.
Option (3) Privatisation — A dimension of the policy. Private firms got a bigger role in industry.
Option (4) Globalization — A dimension of the policy. Indian industry was opened to foreign trade, technology and investment.