BPSC 69th CCE Prelims General Studies · Question 116 of 144

Correct — A, 1956. The document itself settles the date. Its heading reads "GOVERNMENT OF INDIA — INDUSTRIAL POLICY RESOLUTION — New Delhi, the 30th April, 1956", under file number No. 91/CF/48, and the Second Five Year Plan, which reprints the full text as an annexure to its second chapter, records that "the new Industrial Policy Resolution was placed before Parliament by the Prime Minister on the 30th April, 1956". Jawaharlal Nehru moved it himself, four days before the Second Plan's industrial programme had to stand on it. The Resolution is the founding charter of India's mixed economy. It sorted all industry into three categories by the part the State would play: Schedule A, seventeen industries whose future development would be "the exclusive responsibility of the State" — arms and ammunition, atomic energy, iron and steel, coal and lignite, mineral oils, aircraft, air transport, railway transport, shipbuilding and the generation and distribution of electricity among them; Schedule B, twelve industries that would be "progressively state-owned" with private enterprise supplementing the State, including machine tools, fertilizers, antibiotics and other essential drugs, aluminium and other non-ferrous metals, road transport and sea transport; and a third category, everything else, left in general to private initiative. Its own justification is quoted in the Plan: "The adoption of the socialist pattern of society as the national objective, as well as the need for planned and rapid development, require that all industries of basic and strategic importance, or in the nature of public utility services, should be in the public sector." Paragraph 2 explains why 1956 and not earlier — in the eight years since the Resolution of 6 April 1948 the Constitution had been enacted, planning had been organised, the First Five Year Plan had just been completed and Parliament had accepted the socialist pattern of society, and "the second Five Year Plan will soon be placed before the country". Paragraph 6 records that the three-way classification was decided "in consultation with the Planning Commission", and paragraph 8 keeps a still narrower core outside even Schedule A's general rule: "Railways and air transport, arms and ammunition and atomic energy will, however, be developed as Central Government monopolies." One point of precision worth carrying, because almost every summary gets it loose: the Resolution annexes exactly two schedules, Schedule A with seventeen entries and Schedule B with twelve. There is no Schedule C in the document. The third category is defined in paragraph 7 as "all the remaining industries" and left to private initiative in the text, and 'Schedule C' is only the conventional shorthand later writers gave that residual.

• (b)1954 — The most defensible wrong answer, because 1954 is when Parliament accepted the socialist pattern of society as the objective of economic policy — the political premise the Resolution cites in its own text. Paragraph 4 dates it exactly: "Parliament accepted in December, 1954, the socialist pattern of society as the objective of social and economic policy", an objective the Congress went on to endorse at its Avadi session in January 1955. So a candidate choosing 1954 has remembered a real and closely related event. But an objective is not an industrial policy: no industrial policy document was issued in 1954, and the Resolution that turned that objective into a reserved list of seventeen industries came two Aprils later.
• (c)1952 — No industrial policy statement belongs to 1952. The year sits between two things a candidate may be half-remembering: the Industries (Development and Regulation) Act, 1951 — the licensing statute that gave the policy resolutions their legal machinery, and which paragraph 11 of the 1956 Resolution names as the instrument private undertakings would be regulated under — and the First Five Year Plan, launched in 1951. Neither is the Industrial Policy Resolution. The distinction is worth holding on its own: the Act is law and creates obligations, the Resolution is a statement of policy laid before Parliament and creates none.
• (d)1950 — 1950 is a landmark year for other reasons — the Constitution came into force on 26 January and the Planning Commission was set up by a Cabinet resolution in March — but the industrial policy actually in force through 1950 was still the Industrial Policy Resolution of 6 April 1948, which the 1956 Resolution replaced. The 1956 text is explicit that it is a successor document: it opens by summarising what "the Government of India set out in their Resolution dated the 6th April, 1948", and paragraph 19 notes that several subjects the 1948 Resolution dealt with had since been covered elsewhere — the Centre–State division of industrial responsibility by the Industries (Development and Regulation) Act, and foreign capital by the Prime Minister's statement in Parliament of 6 April 1949.

An industrial policy resolution is not a statute; it is a statement of intent laid before Parliament that tells the State, the private sector and the licensing authority who may build what. India has had two such Resolutions and several later Statements. The Resolution of 6 April 1948 made arms and ammunition, atomic energy and railway transport a Central Government monopoly and reserved new undertakings in six basic industries to the State, leaving the rest open. The Resolution of 30 April 1956 replaced it with a far more ambitious design built for the Second Five Year Plan and the Mahalanobis strategy of heavy-industry-led growth: Schedule A for the State alone, Schedule B for a mixed sector the State would enter progressively, and everything else for private enterprise. The Second Five Year Plan's own summary of the Resolution was careful to add that these categories were "not intended to be rigid or watertight" — the phrase belongs to the Plan's narrative, not to the Resolution's text — the State could enter any field, and private units already in Schedule A industries could expand. The legal teeth came from the Industries (Development and Regulation) Act, 1951, under which the licence became the instrument of control. The Resolution is also much broader than its two schedules. Paragraph 5 sets the growth strategy — accelerate industrialisation, "in particular, to develop heavy industries and machine making industries, to expand the public sector, and to build up a large and growing co-operative sector", while reducing disparities in income and wealth and preventing "private monopolies and the concentration of economic power". Paragraphs 13 and 14 commit the State to cottage, village and small-scale industry on the ground that it gives "immediate large scale employment", spreads income more equitably and avoids the ills of unplanned urbanisation, and record that industrial estates and rural community workshops had been started for it. Paragraph 15 makes the reduction of regional disparities in industrial development an explicit aim — the clause that mattered most to a state like Bihar. Paragraph 17 says that "in a socialist democracy labour is a partner in the common task of development" and that workers and technicians should progressively be associated in management. Paragraph 18, unusually candid, accepts that public enterprises "may sometimes incur losses", asks that they be judged by their total results and calls for decentralised authority and management along business lines.

This is a pure recall item, and the safe way to fix the date is to attach it to something structural rather than memorise a number. The Industrial Policy Resolution is the industrial charter of the Second Five Year Plan, which ran from 1956 to 1961; a charter cannot post-date the plan it is written for, and the Resolution's own paragraph 2 says a fresh statement was needed because "the second Five Year Plan will soon be placed before the country". That fixes 1956 and eliminates 1950, 1952 and 1954 in one move. The single trap worth naming is different from the four options on offer: the phrase 'Industrial Policy Resolution' also fits 1948, and a candidate who recalls 1948 will find no matching option and may then guess the nearest year. Remember that only 1948 and 1956 were called Resolutions — 1977 and 1980 were Industrial Policy Statements and the July 1991 document is the New Industrial Policy — and that when an Indian exam says 'the Industrial Policy Resolution' without a year, it means 1956. One further precision protects you against the follow-up question this topic always generates. The Resolution annexes two schedules and only two: Schedule A with seventeen industries and Schedule B with twelve. Coaching summaries routinely speak of 'Schedules A, B and C', which is a convenient label rather than a quotation — the third category exists in paragraph 7 as 'all the remaining industries', with no schedule attached to it. If a paper ever asks how many industries were listed in the Resolution's schedules, the answer is twenty-nine across two lists, not three.

• The Resolution is headed "New Delhi, the 30th April, 1956", numbered No. 91/CF/48, and was placed before Parliament by Prime Minister Nehru that day
• Schedule A: 17 industries reserved for the exclusive future development of the State, including arms and ammunition, atomic energy, iron and steel, coal and lignite, mineral oils, aircraft, air transport, railway transport, shipbuilding, and generation and distribution of electricity
• Schedule B: 12 industries to be progressively state-owned with private enterprise supplementing the State — among them machine tools, ferro-alloys and tool steels, fertilizers, antibiotics and other essential drugs, synthetic rubber, road transport and sea transport
• The predecessor Resolution of 6 April 1948 made arms and ammunition, atomic energy and railway transport a Central Government monopoly and reserved new undertakings in six basic industries to the State
• Enforcement ran through the Industries (Development and Regulation) Act, 1951; the regime lasted until the New Industrial Policy of 24 July 1991 abolished licensing for all but 18 industries and cut the public-sector reserved list from 17 to 8
• The Resolution annexes only two schedules — Schedule A (17 industries) and Schedule B (12) — so 'Schedule C' is a later shorthand, not a part of the document; paragraph 7 calls the third category simply 'all the remaining industries'
• Paragraph 8 keeps a hard core even inside Schedule A: 'Railways and air transport, arms and ammunition and atomic energy will, however, be developed as Central Government monopolies'; where private cooperation is needed the State is to secure control 'through majority participation in the capital or otherwise'
• Paragraph 12: the categories are not 'water-tight compartments' — the State may start any industry outside both schedules, private units may make a Schedule A item for their own use or as a by-product, and small private units may build launches and light craft, generate power for local needs and do small-scale mining
• Paragraph 4 dates the political premise: 'Parliament accepted in December, 1954, the socialist pattern of society as the objective of social and economic policy'; paragraph 6 says the three-way classification was settled 'in consultation with the Planning Commission'
• Beyond the schedules the Resolution commits the State to cottage, village and small-scale industry (paragraphs 13–14, citing industrial estates and rural community workshops), to reducing regional disparities in industrial development (paragraph 15), to associating workers and technicians in management (paragraph 17), and it concedes that public enterprises 'may sometimes incur losses' and should be judged by their total results (paragraph 18)

• Confusing the 1948 Resolution with the 1956 one. Both are called Resolutions; 1948 was dated 6 April and 1956 was dated 30 April, and it is 1956 that annexes the schedules — Schedule A with seventeen industries and Schedule B with twelve, the third category being paragraph 7's unscheduled remainder
• Treating the 1991 document as a 'Resolution'. It is the New Industrial Policy, a statement made on 24 July 1991, and it dismantled rather than extended the 1956 framework
• Assuming a Schedule A industry was closed to private firms outright. The Resolution said the categories were not watertight — existing private units could expand and the State could invite private cooperation, usually with majority State participation

BPSC asks this as a bare year — one line, four dates, no context — so the mark goes to whoever has the calendar of post-independence economic policy in order, and the option list is built from neighbouring years rather than absurd ones, which is why a vague memory is worse than none. UPSC almost never asks the year; it asks what the framework did and when it ended, as in its 2000 question on what economic liberalisation started with and its 1997 question on how far the compulsory licensing list had been cut. The efficient preparation for both is one dated chain: Resolution 1948, Constitution 1950, IDRA 1951, First Plan 1951, socialist pattern December 1954, Resolution 30 April 1956, Second Plan 1956–61, MRTP 1969, Statements 1977 and 1980, New Industrial Policy 24 July 1991.

• practice — not a real PYQ

  Under the Industrial Policy Resolution, 1956, industries listed in Schedule A were:

  • (a)left entirely to private enterprise
  • (b)the exclusive future responsibility of the State
  • (c)reserved for the small-scale sector
  • (d)open only to foreign collaboration

  Answer(b) the exclusive future responsibility of the State — the Resolution placed 17 industries, including atomic energy, iron and steel, railway transport and electricity, in that category, while Schedule B's 12 industries were to be progressively state-owned.

• practice — not a real PYQ

  The Industrial Policy Resolution, 1956 replaced which earlier document?

  • (a)The Industrial Policy Resolution of 6 April 1948
  • (b)The Industries (Development and Regulation) Act, 1951
  • (c)The Bombay Plan of 1944
  • (d)The Karachi Resolution of 1931

  Answer(a) The Industrial Policy Resolution of 6 April 1948 — the 1956 Resolution's own opening paragraph refers to it and says eight years of change had made a fresh statement necessary.