What was the central theme of the Industrial Policy Resolution of 1956?
- (a)Full privatisation of industry
- (b)Import-led growth strategy
- (c)State control of commanding heights of the economy
- (d)Promoting consumer goods industry
Answer
Why
Correct — C. The Industrial Policy Resolution of 1956 gave the public sector the leading role in industry, reserving basic and strategic industries for the State.
Its Schedule A listed 17 industries whose future development would be the State's exclusive responsibility. That is State control of the commanding heights of the economy → option (c).
Why the others are wrong
- (a)Full privatisation of industry — Privatisation is the reverse of 1956. Opening industry to private firms came with the New Industrial Policy of 1991, which abolished industrial licensing for most industries.
- (b)Import-led growth strategy — India's strategy then was import substitution, the opposite of import-led growth. Domestic industry was built up behind protection to replace imports.
- (d)Promoting consumer goods industry — The priority in 1956 was heavy and basic industry, which the Second Plan backed. Consumer goods came lower and were left largely to small and cottage industries.
Concept
The Industrial Policy Resolution of 1956 followed Parliament's adoption of a socialistic pattern of society as the goal of economic policy. It sorted industries into three schedules:
Schedule A: 17 industries reserved for the State.
Schedule B: 12 industries to be progressively State-owned, with private enterprise supplementing.
Schedule C: all the rest, left mainly to private enterprise.
'Commanding heights' means the key sectors, such as heavy industry, energy and transport, on which the rest of the economy depends. In 1956 India placed them under the State through Schedule A.
Key facts
- Industrial Policy Resolution, 1956: Schedule A reserved 17 industries for the State.
- Schedule B listed 12 industries to be progressively State-owned, with private enterprise supplementing.
- Schedule A included arms and ammunition, atomic energy, iron and steel, and railway transport.
- The New Industrial Policy of 1991 reversed this approach and abolished industrial licensing for most industries.
Study next
Common traps
- Choosing consumer goods because planning aimed at welfare. The 1956 priority was heavy and basic industry.
- Mixing up 1956 with 1991. The 1956 resolution widened the State's role, and the 1991 policy cut it back.
Here the 1956 resolution is asked by its central theme. Its main objective is asked at 23 Sep 2025, 09:00, GA Q.21 (keyed: growth with equity), and the plan that carried it out at 23 Sep 2025, 09:00, GA Q.24 (keyed: the Second Plan).
Related PYQs
No directly related past PYQ was found.