SSC CGL 2025 Tier-I · 19 September 2025, Shift 3 · General Awareness · Question 22 of 100

We transcribed this text from the pictures on a candidate's response sheet for this shift; the answer is the key SSC colour-marked on that sheet. Solution last reviewed 11 September 2026.

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Read the following statements carefully and choose the correct option regarding Assertion (A) and Reason (R). Assertion (A): The New Economic Policy of 1991 resulted in the abolition of industrial licensing for most industries. Reason (R): Licensing was re-imposed to regulate growing private sector monopolies.

(a)Both A and R are true and R is the correct explanation of A.
(b)Both A and R are true but R is not the correct explanation of A.
(c)A is true but R is false.
(d)A is false but R is true.

Answer

Why

Correct — C. Take the two statements separately.

Assertion: true. The 1991 reforms abolished industrial licensing for almost all industries. NCERT lists the exceptions: alcohol, cigarettes, hazardous chemicals, industrial explosives, electronics, aerospace, and drugs and pharmaceuticals.

Reason: false. Licensing was not re-imposed. Monopoly power is handled by competition law, the Competition Act, 2002, which replaced the MRTP Act, 1969.

A true, R false → option (c).

Why the others are wrong

(a)
Both A and R are true and R is the correct explanation of A. — R is false, so it cannot explain A. Industrial licensing was abolished in 1991 and has not been brought back to curb monopolies.
(b)
Both A and R are true but R is not the correct explanation of A. — This needs R to be true. Licensing was not re-imposed, so R fails before the question of explanation arises.
(d)
A is false but R is true. — A is true: abolishing industrial licensing for most industries was the centre of the 1991 industrial reform.

Concept

Before 1991, industrial licensing meant every entrepreneur needed government permission to start a firm, close one or decide how much to produce.

The Statement on Industrial Policy of 24 July 1991 ended that for all but a short list, and dropped the MRTP Act's prior-approval rule for large firms' expansion. Market power is now watched by the Competition Commission of India, not controlled by licences.

In an Assertion-Reason item a false Reason does most of the work: the options that call both statements true fall away before explanation is weighed.

Key facts

The Statement on Industrial Policy of 24 July 1991 abolished industrial licensing for all but a short list of industries.
NCERT's exceptions: alcohol, cigarettes, hazardous chemicals, industrial explosives, electronics, aerospace, and drugs and pharmaceuticals.
The Competition Act, 2002 replaced the MRTP Act, 1969.
The 1991 reforms began under Prime Minister P. V. Narasimha Rao, with Manmohan Singh as Finance Minister.

Study next

The 1991 balance of payments crisisDereservation of industries for the public sectorThe Competition Commission of India

Common traps

Reading R as the reason licensing ended: R describes a re-imposition that never happened.
Mixing up the MRTP Act, 1969 with the law that replaced it, the Competition Act, 2002.

The same reform is asked directly at 24 Sep 2024, 16:00, GA Q.17 and 19 Jan 2026, 11:00 AM, GA Q.16. The 1991 crisis behind it is an Assertion-Reason pair at 17 Sep 2025, 16:00, GA Q.22.

Related PYQs

No directly related past PYQ was found.